Can the outperformance of the US market continue?

SPONSORED CONTENT – The US has rallied far more aggressively than its peers. Why have European equities fallen so far behind?

If stockmarkets were in a race, the Americans would be taking all the gold medals while the Europeans would be lucky to collect a handful of bronze. To grasp just how far US equities have raced ahead of the pack, just look at the chart accompanying this article. It looks at returns from major national stock market indices since the end of the global financial crisis in 2009. Green indicates the S&P 500 in the US, black the UK’s FTSE 100, light blue the UK mid-cap index, the FTSE 250 (more on that one in a moment), and purple the eurozone’s Stoxx 50 index.

Even if we look at returns since the coronavirus-induced sell-off, and subsequent rally, it’s clear that while all of the key benchmarks sold off in synchronised fashion, the US has rallied far more aggressively than its peers. So, why have European (and especially UK equities) fallen so far behind? The table below, showing the makeup of the individual indices, sheds some light on the topic.

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