That the eurozone expanded by 0.5% in the first quarter – better than the equivalent 0.3% from the UK – underlines this optimism.
As Shilen Shah, bond strategist at Investec Wealth & Investment, remarked today, in contrast to the more “tepid” performance in the UK and US, the latest eurozone stats suggest some solidarity for the rest of the year.
“Despite some tightness in the German labour market, the relatively high level of unemployment for the eurozone as a whole would indicate that there remains a significant amount of spare capacity, suggesting a period of above trend growth is possible,” he said.
Reasons for further optimistism then, perhaps.
Far from being a contrarian choice for UK investors, it is worth noting there is around £50bn invested across the 111 funds in the IA’s Europe ex UK sector, marginally more than is allocated to the North American funds category.
“When you consider that Europe ex UK makes up 14% of the MSCI World Index, compared with 54% for the US, in relatively terms this is a significant overweight,” notes Gavin Haynes, managing director at Whitechurch Securities Wealth Management.
He also highlights that there is twice as much ISA money committed to the European sector than to North America, and household names such as Nestlé, Unilever and Novartis are a big part of that.
