European equities are punching below their weight

He says that while US stock markets have risen higher than the underlying earnings would warrant, European stocks have not kept pace with the rise in company profits in the opening three months of 2017. Instead, investors have focused on gloomier issues such as the Brexit and fears over populism.

It means that US equities are “priced for perfection” while European stocks are “priced for depression”, says Daalder, Chief Investment Officer of Robeco Investment Solutions. Subsequently, his multi-asset fund is currently overweight European equities compared with the US, though he refrains from blindly chasing stocks, as risks remain.