One interviewee stressed European equities have more potential than their American equivalents considering the European recovery has only just started, leaving room for margin expansion. But another fund selector said she prefers US equities, arguing the imminent deflationary threat in the Eurozone casts a shadow over equities in the region. Many US fans dismiss European equities because of the meagre growth prospects on the continent. At the same time Europe bulls tend to disqualify American stocks, most often due to their high valuations.
Europe on top
Dutch fund selectors have comparable weightings to both asset classes at the moment, but allocation projections are significantly more benign for European equities than for US equities. Four in 10 interviewees say they will increase their exposure to European stocks, a significantly higher share than is the case for US equities.
Still, appetite for US equities has rebounded quite significantly over summer, with sentiment now comfortably back into positive territory. In June, only 12% of Dutch fund selectors were planning to increase their allocation to US equities. In less than three months, this percentage has doubled.