Europe Special: Can investors see beyond political headwinds?

Investors are getting increasingly jittery about Europe. Political risk is ratcheting up as elections in the Netherlands, France and Germany over the coming months have the potential to threaten the very existence of the European Union and cause ructions across markets.

The volume of options on an index betting on European stock volatility surged to a record this month, according to Bloomberg, with investors particularly concerned about the fallout from the French election in April/May as far-right candidate Marine Le Pen continues to garner support. Add in fears about the ongoing Greek debt debacle and the impact of potential QE tapering later this year on bond markets and investors would be forgiven for steering clear of Europe altogether.  Indeed, this seems to be the case for many retail investors, who have been pulling money out of the region ov...