CB Fonder: Period of European equity outperforming US has started
CB Fonder, the Stockholm based boutique, has said in its latest update on the CB European Quality fund that a period of European equity outperforming US equity has started.
Quite apart from the particular strategy of investing in quality companies – which CB Fonder said has enabled its fund to outperform the MSCI Europe Net index for a third consecutive quarter – there is data to suggest that investors enjoy better returns from European equities over time.
“Europe has performed better than the US, with data going back to 1969,” its latest note stresses.
“Europe has four pronounced periods of underperformance against the US, all of which have bottomed when the accumulated underperformance reached 40% – the same level that was reached at year-end 2014.”
“We argue that a new period of outperformance has started for Europe – and so far you have missed almost nothing – +2% since the trough at year-end 2014/2015.”
Should this prove the case then there is other data to suggest that the period of outperformance could last between 24-101 months, leading to an accumulated outperformance of between 75%-102%, CB Fonder added.