Lower valuations may help European equities outperform

Their net fall since the invasion of Ukraine means the valuations of European equities are now even lower relative to those of US stocks. While valuations have a mixed track record at predicting returns over short periods, they are key to our view that European stocks will outperform US equities in the coming decade. In view of the wider interest, we are also sending this Long Run Update to clients of our Asset Allocation Service.