Based on the classical valuation metrics like the CAPE (Shiller PE’s) the US equity markets look a bit more expensive then the European equity markets. Ugo Montrucchio, fund manager at Schroders, calls the Eurozone more a ‘value trade’ and the US a ‘growth trade’.
Despite the higher correlations Montrucchio still recommends investors to spread over the different stocks and asset classes. He points out that during the US Quantitative Easing programs investors preferred local US (small caps) instead of the more international focused large caps.
Mr Montrucchio is quite afraid that lower liquidities in the markets could be 2015-Black Swans.