Will flows into Europe re-accelerate in H2 2018?

European equity markets remain attractive to us. The combination of a solid macroeconomic backdrop outside the region and a strong recovery domestically has helped propel earnings higher.

Yet, pan-European indices have lagged their global peers so far this year. We attribute this to currency fluctuations. Indeed, measured in euro terms, the performance of pan-European stocks has been pretty much in line with the rest of the world while eurozone equities (i.e. excluding UK and Switzerland) have actually outperformed marginally.  In future, we would expect eurozone equities to deliver further outperformance. First, positioning is still supportive. Although being long Europe may seem consensual at this point, we believe most investors remain under-exposed to the region...