Do European equities offer 'tremendous value'?

If you had not been paying attention to financial markets for quite a few years and then – from this position of naivety – had looked at the eurozone, your likely conclusion would be that the region's equity bourses were offering tremendous value.

Equity pick-up yields against government fixed interest alternatives or money in the bank are materially positive. Meanwhile, cashflow generation, levels of corporate debt and plain old earnings valuations are all supportive if not downright attractive. Combine outflows from global investors throughout recent years and the current low sentiment towards eurozone equities, and the rationale for an optimistic positioning seems to be only getting stronger.   Of course it is never this easy. While eurozone equity markets have on average advanced this year, nothing has happened to partic...