With the bull market in U.S. stocks aging and investors increasingly feeling stocks here are richly valued, some are turning to Europe and the related exchange traded funds in search of bargains. FEZ shows a 14.2 P/E and a 1.5 P/B, whereas the S&P 500 Index is hovering around a 18.7 P/E and a 2.7 P/B.

“But from a broad, regional asset class perspective, when we look at price-to-book value (P/B) adjusted for sector comparability across regions,we see that Europe is trading 33% below the US on a P/B basis. This is one of the deepest discounts in 20 years—a period that includes two recessions and the debt crisis,” according to State Street.

European cyclical stocks are attractively against U.S. equivalents, which is a positive for FEZ. The ETF devotes over 47% of its combined weight to cyclical financial services, industrial and consumer discretionary names.

For more information on the European markets, visit our Europe category.