How do you take advantage of investing In europe and actually what do you say To the ones that say that you know think That forecasts for earnings are just too High Given the uncertainties ahead europe is Is really one of the last regions where You can still Find cyclicality at a discount and Obviously when we think about what we've Been doing in portfolios and really Across the market it's been taking shape As well Um investors have been looking to add Cyclicality and reflation beneficiaries And europe is a region when it comes to The reopening Trade that really is front and center we Think europe's reopening is going to Take place Through the second quarter probably more Vigorously in the third quarter Um and driven primarily by by consumer Health and pent up demand But when we think about valuation of European equities Despite the fact that actually european Equities have this cyclical flavor Are typically correlated to rising u.s Treasury yields Europe has lagged um since the bottom of The pandemic and is often still Underweight in portfolios so what we Expect to happen and what we think is
Starting to happen just in the last few Months Um is that europe is being closed and Taken back up to a neutral waiting We are reticent to say whether europe Will become an overweight rating In portfolios at large because once We're through the next couple of Quarters and this very strong rebound That we expect to take place we still Think that the secular growth story for Europe Isn't as attractive as we would see it In the u.s or Asia so we do think that the rotation Towards european equities can continue For another couple of quarters but we Still think that over the longer term You want to be looking to the us to asia And to mega trends when you're thinking About secular growth
