What is driving a brighter outlook for European small caps?

Less constrained by global macro risk

European large caps have struggled to make headway in the face of macro events this year, with weak oil prices and US foreign policy uncertainty post-Trump all holding stocks back.

Domestically, the region has also faced major national elections in countries including the Netherlands, France and the UK. But with neither of the votes in mainland Europe producing populist shocks, the outlook has improved markedly.  A Le Pen victory in France could have punished investors. Instead, we experienced an outcome that effectively maintains the status quo in Europe's fractured political environment. Europe and Brexit: Don't try to second guess the impact President Emmanuel Macron is now able to push forward French economic reforms, potentially transforming the second l...