Investors’ broad exodus from Europe has opened up attractive opportunities in Britain, Scandinavia and Switzerland, whose companies have been tarnished by the same brush as those in crisis-hit euro zone, reckons Robeco.
“Because of the euro zone issues, international investors have sold off Europe in total,” says Mark Glazener, head of global equities at Robeco. “In a lot of cases you can buy European versions of companies, which are not situated within the euro zone for much cheaper than an American or an Asian one.”
Swedish equities are trading on a price to free cashflow ratio of just 4.9 times, with Switzerland on 11.4 times and UK on 11.5 times, according to Thomson Reuters Starmine data. That compared to the euro zone on 9.4 times and United States on 15.5 times.
Robeco remains neutral on the euro zone, having upped its view from negative following ECB’s pledge to stand by the euro in the summer, but still seeing too many risks in the region to turn positive.
“We do see from a bottom-up perspective attractive companies (in the euro zone) but from a top-down perspective we don’t trust them very much. So we do invest in some companies and then sell futures to neutralize exposure to the euro zone,” Glazener says.
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