Investors are becoming braver and feeling more confident that the European debt woes that plagued the market last year are subsiding. Shares and exchange traded funds that track the European market have been trending higher on improved sentiment.

“Two things have changed for the better,” Russ Koesterich, global chief strategist for iShares, said. “The U.S. has clearly stabilized, and this has removed one of the risks to the global economy. The other is that the ECB has at least addressed the liquidity problems at the banks.” [VIX ETFs Bounce on Greek Jitters as Stocks Near 2011 Highs]

Last year’s sharp market declines have made European shares and ETFs look cheap this year. Jonathon Burton at reports that Europe-stock focused mutual funds had lost an average of 15% in 2011, while ETFs lost 17%, according to Morningstar data. [European Financial ETF is Contrarian Investment]

The benchmark MSCI Europe Index has recently been valued at 9.8 times estimated 2012 earnings, compared to an average of 17 times earnings over the past 25 years, according to MSCI data. Furthermore, dividend yields have shot up on companies of well-known European companies as share prices have waned.[Emerging Market ETFs Double S&P 500’s Gain]

“It’s not a bad time to buy,” Koesterich said. “You’re getting a cheap valuation and a high dividend.”