Speaking at a conference for advisers recently, Fidelity European Fund manager Tim McCarron said the broad outlook for investing in Europe remains positive.
He said: “Looking at the equity bond yield, European equities remain attractively valued. Inflation should remain low given the European Central Bank’s tight focus on inflation and proactive stance, the effects of globalisation, less direct influence from labour markets and the low cost of east-European manufacturing and labour.
“History tells us that periods of low inflation rates, such as the one Europe is currently witnessing, can support higher company valuations than is currently the case which in turn suggests that markets could continue their upward trend.”
McCarron said in his opinion the German market is key.
He said: “Germany’s continued recovery bodes well and a peak in unemployment some two years after a similar peak in the US suggest that the German, and indeed European, consumer could take an active role in the next phase of Europe’s economic growth.”