The ECB has been buying bonds to lower debt yields across the Eurozone, forcing investors to turn to riskier assets, like stocks, to generate decent returns. Additionally, the ECB’s actions has also depreciated the euro currency, which has benefited the regions’ exporters. [Europe ETFs Bounce on Improved Outlook for Exporters]
Scott Meech, co-head of European Equities at Union Bancaire Privée, anticipates that these drivers of growth across the Eurozone will remain in place even if the global economy slows.
“It’s hard not to envisage more of the same,” Meech told the WSJ. “The modest recovery in Europe looks set to continue.”
Nevertheless, investors should be mindful of potential risks. For instance, some observers still have lingering concerns over Greece’s financial solvency. Additionally, Andreas Koester, head of asset allocation and currency at UBS Global Asset Management, pointed to political risk from Spain’s election and the prospect of a U.K. referendum on European Union membership.
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For more information on the European markets, visit our Europe category.
Max Chen contributed to this article.