Some investors are growing increasingly wary of European banks as ETFs tracking financials saw net outflows in Europe and the U.S. Goldman sachs research found mutual funds were on average holding fewer bank shares than benchmark indices and even raised short positions on the sector year-over-year. However, some market observers believe opportunities remain with European stocks.

“Investors have fled European stocks to escape political uncertainty surrounding Italy and Brexit and as disappointing earnings captured just a fraction of the boom in U.S. profits,” according to Bloomberg.

The U.K. is VGK’s largest geographic allocation at 28.4% of the fund’s weight. France and Germany, the Eurozone’s two largest economies, combine for 29.4% of VGK’s weight.

“A survey of major fund managers by Bank of America Merrill Lynch showed that investors are the most bearish on euro-zone equities in six years and their positioning in the region’s equity market this month dropped to underweight for the first time since December 2016,” according to Bloomberg.

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