European Shares’ Winning Streak Keeps on Rolling Upwards 

Record-Breaking Market Performance

Despite concerns regarding AI disruptions and White House tariffs, recent data released shows that European shares have enjoyed an eight-month streak of gains, and it is confirmed to be the longest monthly streak since 2013. The Stoxx Europe 600 index* is up 4% this month, with data released from EPFR Global** showing US$10 billion being received by European stock mutual funds and ETFs over the last two weeks, and it is also the fourth straight week of inflows. 

*The Stoxx Europe 600 Index – A broad measure of the European equity market, consisting of a fixed number of 600 components. It provides extensive and diversified coverage across 17 countries and 11 industries within Europe’s developed economies, and represents 90% of the underlying investible market. This index is a key indicator for European equities.

**EPFR Global – Formerly recognised as Emerging Portfolio Fund Research, it is a leading provider of global fund flow and asset allocation data for financial institutions. It tracks over $55 trillion in assets across more than 151,000 share classes globally. 

Experts and analysts agree that global investors have been looking at European stocks as a means of diversifying away from US markets, with concerns regarding the economy and the tech market, and additionally an AI bubble. Analysts also advise that US based investors are looking to diversify their portfolios by moving into European equities, which have less “tech” than their peers in the USA. 

Strength in the “Old-Economy” Sectors

Indeed, the composition of the markets in Europe has helped the boom in European shares. With fears of AI disruption in the US, the old-economy sector favourites such as utilities, telecommunications, basic resources and energy have outperformed market expectations, with some posting double-digit returns. Also, in 2025, analysts advised that Germany finally returned to growth for the first time since 2022, and with billions being spent on defence (announced March 2024), feeding through to various industries, German equities will once again become more attractive. 

A Positive Outlook for 2026

Experts advise that the outlook for European equities in 2026 is broadly positive, with total returns ranging between 6% – 13%. Analysts suggest that Europe is entering a “new era” underscored by robust fiscal expansion, especially in Germany, accelerating domestic growth, with investors realigning their portfolios away from expensive US mega-caps. 

Many global investors are looking for cheaper bargains, and according to recent data released, the Stoxx Europe 600 Index is trading at a price-to-earnings-ratio of 18.3, whilst the S&P in the United States is trading at 27.7. Experts suggest that European stocks are being driven by domestic stimulus delivery as well as rotation away from the tech sectors to the non-tech sectors.