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The Robeco Capital Growth Funds have not been registered under the United States Investment Company Act of 1940, as amended, nor or the United States Securities Act of 1933, as amended. None of the shares may be offered or sold, directly or indirectly in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”)). Furthermore, Robeco Institutional Asset Management B.V. (Robeco) does not provide investment advisory services, or hold itself out as providing investment advisory services, in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act).

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This website has been carefully prepared by Robeco. The information contained in this publication is based upon sources of information believed to be reliable. Robeco is not answerable for the accuracy or completeness of the facts, opinions, expectations and results referred to therein. Whilst every care has been taken in the preparation of this website, we do not accept any responsibility for damage of any kind resulting from incorrect or incomplete information. This website is subject to change without notice. The value of the investments may fluctuate. Past performance is no guarantee of future results. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. For investment professional use only. Not for use by the general public.

I Disagree

06-02-2025 · Insight

Old World, new money: Are European equities making a comeback?

Could increasing exposure to European equities be beneficial for today’s investor? In a new paper, we examine the current landscape of European equities markets, introduce Robeco’s 3D ETF, and make the case for a European equities allocation.

Read the full paper


    Authors

  • Jan Sytze Mosselaar - Portfolio Manager

    Jan Sytze Mosselaar

    Portfolio Manager

  • Dijana Kostic - Client Portfolio Manager

    Dijana Kostic

    Client Portfolio Manager

Summary

  1. European stocks have lagged significantly in the post-2008 US-driven bull market

  2. Allocating to Europe can make sense from a diversification & valuation perspective

  3. Our new 3D ETFs seek optimal balance between return, risk and sustainability

A shift in market leadership?

Figure 1 shows the historical ebb and flow of regional equity leadership. Since the global financial crisis, US stocks have delivered extraordinary returns. But this year marks a change. For the first time in over a decade, European equities have decisively outperformed their US peers – a potential signal that the era of US dominance has paused, if not ended.

Figure 1 I Has the extended market leadership for US equities come to an end for now?

Figure 1 I Has the extended market leadership for US equities come to an end for now?

Source: Robeco, LSEG, MSCI. The figure shows the relative performance of the MSCI USA Index versus the MSCI Europe Index. A new cycle begins after the peak of the previously outperforming market, once the previously underperforming market has outperformed by at least 20% from its preceding low. Performance is based on end-of-month total return indices in USD. The sample period spans from January 1970 to April 2025.

This figure is for illustrative purposes only and does not represent a particular investment product or strategy.


Why Europe? Three compelling reasons

  1. Global exposure at attractive valuations
    Large European stocks offer balanced, global exposure against attractive valuations. Companies in the MSCI Europe derive 60% of their revenues outside of Europe, and the index’s sector composition is more balanced than the tech-heavy S&P 500. In addition, European stocks are cheaper – from both a relative and historical perspective – than their US counterparts.

  2. Global benchmarks are now skewed
    Today’s global benchmarks are no longer diversified in terms of country exposure: the MSCI ACWI has a 63% weight in US stocks versus only 17% in Western Europe – a stark contrast to 15 years ago, when the split was 40% US and 28% Europe. For investors seeking more diversified country exposure, equal-weighted indices and regional rebalancing deserve renewed attention.

  3. Europe is unloved and under-owned
    Over the last ten years, active European equity strategies have seen a cumulative EUR 75 billion in outflows. Yet financial history tells us: the smaller the audience, the bigger the miracle. With sentiment at a low, new money flowing into European equities could trigger a multi-year trend reversal.


A timely entry point and a smarter way in

For investors considering a return to the Old World, Robeco offers a range of active strategies focused on European equities. Our latest addition is the 3D European Equities ETF, a forward-looking strategy designed to deliver a balanced mix of return, risk management, and sustainability integration. Priced at a competitive fee of just 0.25%, it offers investors a systematic and cost-effective way to gain exposure to European markets.
In our new paper, we detail the strategy’s design and its role within a diversified portfolio, while considering the broader investment landscape – and why it might just be Europe’s moment.

Read the full paper


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Important information
The Robeco Capital Growth Funds have not been registered under the United States Investment Company Act of 1940, as amended, nor or the United States Securities Act of 1933, as amended. None of the shares may be offered or sold, directly or indirectly in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”)). Furthermore, Robeco Institutional Asset Management B.V. (Robeco) does not provide investment advisory services, or hold itself out as providing investment advisory services, in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act).
This website is intended for use only by non-U.S. Persons outside of the United States (within the meaning of Regulation S promulgated under the Securities Act who are professional investors, or professional fiduciaries representing such non-U.S. Person investors. By clicking “I Agree” on our website disclaimer and accessing the information on this website, including any subdomain thereof, you are certifying and agreeing to the following: (i) you have read, understood and agree to this disclaimer, (ii) you have informed yourself of any applicable legal restrictions and represent that by accessing the information contained on this website, you are not in violation of, and will not be causing Robeco or any of its affiliated entities or issuers to violate, any applicable laws and, as a result, you are legally authorized to access such information on behalf of yourself and any underlying investment advisory client, (iii) you understand and acknowledge that certain information presented herein relates to securities that have not been registered under the Securities Act, and may be offered or sold only outside the United States and only to, or for the account or benefit of, non-U.S. Persons (within the meaning of Regulation S under the Securities Act), (iv) you are, or are a discretionary investment adviser representing, a non-U.S. Person (within the meaning of Regulation S under the Securities Act) located outside of the United States and (v) you are, or are a discretionary investment adviser representing, a professional non-retail investor.


Access to this website has been limited so that it shall not constitute directed selling efforts (as defined in Regulation S under the Securities Act) in the United States and so that it shall not be deemed to constitute Robeco holding itself out generally to the public in the U.S. as an investment adviser. Nothing contained herein constitutes an offer to sell securities or solicitation of an offer to purchase any securities in any jurisdiction. We reserve the right to deny access to any visitor, including, but not limited to, those visitors with IP addresses residing in the United States. This website has been carefully prepared by Robeco. The information contained in this publication is based upon sources of information believed to be reliable. Robeco is not answerable for the accuracy or completeness of the facts, opinions, expectations and results referred to therein. Whilst every care has been taken in the preparation of this website, we do not accept any responsibility for damage of any kind resulting from incorrect or incomplete information. This website is subject to change without notice. The value of the investments may fluctuate. Past performance is no guarantee of future results. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. For investment professional use only. Not for use by the general public.