U.S. investors look to Europe for next leg of stock gains

 U.S. investors look to Europe for next leg of stock gains

NEW YORK (Reuters) – As U.S. stocks are hit with a bout of volatility, some investors are looking to European equities, attracted by lower valuations and the region’s nascent emergence from the COVID-19 pandemic.

FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri/File Photo

European equity funds have notched their longest streak of net inflows in more than three years, according to data from EPFR, while fund managers globally surveyed by BofA Global Research said they are more overweight European stocks than at any time since March 2018. Morgan Stanley’s strategists, meanwhile, have named holding European stocks as one of their top trades.

The focus on Europe comes as the region’s benchmarks have kept pace with their U.S. counterparts after years of underperformance. The STOXX 600 is up 10.7% year-to-date,…

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