Earnings are the long-term engine of equity markets, underscoring why the double-digit earnings growth of the STOXX Europe 600 for the first half of this year is noteworthy.

Key takeaways:

• Global economic acceleration, fiscal expansion, recovering earnings growth—see the chart, attractive relative valuations, and the potential for a stable U.S. dollar may support a favorable outlook for European equities.¹
• This doesn’t guarantee the outperformance of European stocks versus U.S. stocks over the short term. However, history does suggest that globally diversified portfolios have the potential to offer strong risk-adjusted returns over the long term.²
• When exploring diversification opportunities for your clients, remember that Schwab Asset Management® offers a range of international equity mutual funds and ETFs, including ones based on the Fundamental Index® methodology.