Despite substantial benefit for equity capital, compared to risk-free assets, many major funds do not invest into European stock. The total ATHEX index closed at 840.58 points, having lost 4.28 % compared to 878.17 points on June 21, 2020. The FTSE-25 Large Cap Index dropped by 4.12% and settled at 2112.37 points, even though the Small Cap Index dropped only by 0.97%. Previously in Europe no such drops were detected.
All this started happening due to the COVID-19 crisis, but still the attitude towards Europeans stock has never, against the popular opinion, been very positive. After the 2008 crisis, major funds stopped investing into European shares for one simple reason – here the depreciation of investment will surface much later than in the US.
Why is this happening?
Irrespective of the popular opinion European countries do not have a large number of innovative solutions and rapidly growing companies. As a comparison, South Korea can offer much more stable profit of a bigger scale. European conservatism sometimes plays cruel jokes on stocks and forces them to remain on a stable margin for a long time. Even though it is not by itself a bad thing, such stocks are usually unable to produce profit.