Expert-Endorsed Shares Identified as Alternatives
Barclays Suggests Shifting Investments from US Stocks to Undervalued European Equities
Investment bank Barclays has advised that, given the elevated valuations of US stocks, investors may find better opportunities in undervalued European equities. The bank's experts point to lower valuations, a more favorable interest rate environment, and improved corporate profits in Europe as factors making it an attractive alternative.
Alexander Altmann, head of tactical equity strategies at Barclays, explains that while there isn't a fundamental skepticism about US stocks, he sees limited room for further outperformance, hence the recommendation to shift investments out of US stocks.
Barclays isn't the first investment firm to highlight opportunities in Europe. Wealth manager BlackRock had previously identified potential buying opportunities on the continent. Investors interested in this shift could consider the Amundi Stoxx Europe 600 UCITS ETF, iShares Core MSCI Europe UCITS ETF, and Vanguard FTSE Developed Europe UCITS ETF as possible replacements for US stocks.
In recent market commentaries and analyses, both Barclays and BlackRock have outlined various trends and recommendations for global investors. For instance, international equities are noted for their outperformance in 2025, with a reported 11% outperformance compared to U.S. equities. Europe, with fiscal stimulus, improved economic data from China, and potential geopolitical stability, is highlighted as a region where such opportunities can be found.
In addition, BlackRock’s Global Allocation Fund, managed by Rick Rieder, has delivered strong performance in volatile markets by focusing on global opportunities and risk management. The fund seeks to capitalize on undervalued regions and sectors globally, leveraging BlackRock’s extensive research and risk management systems.
Meanwhile, value stocks in defensive sectors like healthcare are highlighted as opportunities, especially those offering defensive characteristics and innovation. There is a clear market rotation favoring value over growth outside the US, with a focus on regions and sectors less exposed to high U.S. growth valuations.
In summary, both Barclays and BlackRock recommend exploring undervalued investment opportunities outside the US, with a particular focus on international equities, especially in Europe. The shift presents compelling opportunities, given fiscal stimulus, improved stability, and the potential for active management to generate significant returns. While Barclays’ specific recommendations are not detailed in the available sources, BlackRock’s analysis is consistent with broader industry views emphasizing diversification and value in international markets.
Barclays recommends shifting some investments from overvalued US stocks to undervalued European equities, citing factors like lower valuations, a better interest rate environment, and improved corporate profits in Europe. Considering that BlackRock had previously identified potential buying opportunities in Europe, investors might find suitable replacements for US stocks in the Amundi Stoxx Europe 600 UCITS ETF, iShares Core MSCI Europe UCITS ETF, and Vanguard FTSE Developed Europe UCITS ETF.
