Globalised companies provide best of both worlds for investors

When asked why he robbed banks, the notorious American robber Willie Sutton is reported to have said: "Because that's where the money is." In a similar fashion, many European companies, frustrated by the limited opportunities at home, have gone global because that is where the growth is.

Their success is, in part, a consequence of the legacy of Europe’s colonies around the world. These have left it with the cultural links and understanding to foster good business relations which are not readily available to US companies without such historic connections. Europe can boast many companies which are world leaders. Thus, the European “conundrum” – where equities have outperformed but economic growth has underperformed relative to the world – is explained largely by the high proportion of company earnings that are derived from emerging markets. Germany and Finland, for example...