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U.S. Hedge Fund Perspectives Shift on Europe

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Stockholm (HedgeNordic) – Perspectives are changing on Europe among U.S. hedge funds, the Financial Times reports. It follows that valuations are looking increasingly attractive to investors compared with the U.S., and a small but growing number of hedge funds are taking the lead in increasing their exposure.

Continental Europe is currently held to be one of the least fashionable markets in the world, not least due to the current geopolitical environment under Mr Trump, who is seen to favour the disintegration of the EU. Consequently, Europe remains less favoured by investors than the U.S.

According to Northern Trust, however, fundamental valuations suggest this consensus is too negative. With a considerable gap between the U.S. S&P 500 Index and the European Stoxx 600, it points to European equities, which have rarely been as cheap by comparison to global prices.

Consequently, interest has grown from bottom-up equity-focused investors in shares in European-listed companies with considerable business based in the U.S., but which are still punished for being “European” by the market. Debt specialists also believe Europe is less crowded than the U.S., while yet others believe the coming political year may yet create attractive entry points for longer term investors.

Picture: (c) viewgene—shutterstock.com

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Glenn Leaper, PhD
Glenn Leaper, PhD
Glenn W. Leaper, Associate Editor and Political Risk Analyst with Nordic Business Media AB, completed his Ph.D. in Politics and Critical Theory from Royal Holloway, University of London in 2015. He is involved with a number of initiatives, including political research, communications consulting (speechwriting), journalism and writing his post-doctoral book. Glenn has an international background spanning the UK, France, Austria, Spain, Belgium and his native Denmark. He holds an MA in English and a BA in International Relations.

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