We previously highlighted the conundrum of European value stocks, particularly banks, trading near their lowest valuations despite boasting their strongest fundamentals in over two decades. Despite continued outperformance, there remains significant potential for a valuation catch-up as investors reassess banks' strategic role in the energy transition.

Global businesses offer natural hedges against currency swings. As euro-based investors, it’s natural to worry about exchange rates, especially when investing in dollar-denominated assets. A key concern we often hear is: What happens if the US dollar weakens? Will this erode returns from US equities?

While stressful, equity volatility and intra‑year pullbacks are surprisingly common. Since 1980, the S&P 500 has averaged an intra‑year decline of around 14 %, with individual drawdowns reaching up to 40 %. This helps put the recent market disturbance into perspective.