After the rally: How to play European equities now

European equity managers are increasing exposure to special situations stocks as they seek new opportunities away from overvalued defensive names.

Investors have been fixated on safety, driving valuations of certain sectors – such as consumer staples – to high double-digit multiples. But with high profile 'quality' stocks on increasingly rich valuations and economic tail risk receding following bond-buying commitments from the European Central Bank (ECB), European equity managers' focus is beginning to shift. The likes of Germany's Dax index have risen 18% over the past three months, prompting a change of tack for some. “Quality is now a pretty difficult theme to play,” said Mark Page (pictured), co-manager of the Artemis Eur...