Despite the crisis in France and the sharp rise in stock prices in the United States. That's why stocks from Europe are suddenly so interesting to fund managers, and that's what the development means for many popular German stocks.
Despite a sharp rise in U.S. stock prices and problems in France, fund managers have recently expressed themselves more favorably about European stocks, a survey by Bank of America shows.
Germany & Co. Why stocks are attractive to fund managers now
A monthly survey of analysts from 206 money managers shows experts see more potential for European stocks than at any time since 2022. Reason: Low rating compared to highly rated USA.
Because the current index P/E ratio on the S&P500 is 21.6. On the other hand, in the EuroSTOXX 600, it is less than 15. So many experts see the potential to hold shares of Germany and Co. With that in mind, a net 30 percent of fund managers overweight Europe in their funds. Technology rally.
What this development means for German stocks
Fund managers are surprisingly bullish on stocks from Europe, meaning experts are further reducing their exposure to high-value technology stocks and focusing more on stocks from Germany & Co.
As a result of this flood of money, bonds from Europe may increase in value if they are rediscovered by “smart money”. As of 2022, such a cycle from growth to value could lead to temporary underperformance of the DAX relative to the S&P500.
However, this growth is by no means guaranteed, especially in view of tensions in Europe and the continent's recent poor economic growth. Find out which stocks from the Eurozone are still exciting in this article: Historical buying opportunities: European stocks with large potential are undervalued.
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