Investors see European stocks as compelling

European equity markets are drawing fresh interest from global investors, as resilient returns and cheaper valuations offer a compelling case for diversification beyond Wall Street.

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The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany. The valuation gap between US and European markets has been long-standing and driven by differences in sectors, funding costs, accounting rules, incentives and regulations.

(REUTERS)

Amundi, Europe’s largest asset manager, and MG _ Investments are among firms reallocating portfolios toward the region. Amundi has rebalanced its long-equity positions into Europe, Japan and emerging markets since late-2024, while MG - which oversees about $395 billion - is “overweight” European stocks and “underweight” US. peers.

European stocks are “a way for us to diversify (while still) staying risk-on,” John O'Toole, global head of multi-asset solutions at Amundi, which manages $2.6 trillion, told the Reuters Global Markets Forum.