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Despite a fairly significant rally beginning in October, European equity markets, battered by major outflows since the start of the crisis in Ukraine, recorded a correction over the year 2022 (-9.5%). Although European equities finished the year on a relative outperformance compared with the United States (-13.4%) and emerging markets (-15.1%)1, the year was still a source of concern for investors, who are now asking questions about what may arise in 2023.

Since the beginning of the year, the European market – like its peers - has suffered a severe correction. Market participants are watching out for the low point, the green light that will allow the market to reposition itself for the long term.

As expected, the rise in long yields has speared a strong style rotation – see our article published in November 2021. Investor appetite for value stocks, coupled with significant profit-taking on growth stocks, has led to “value” companies outperforming their “growth” peers by almost 12% in January 2022So where are we now? And is “value” becoming “overvalued”?

After five months of a strong rotation in styles towards “value” stocks and profit-taking on “growth” stocks, the market has once again placed its trust in fundamentals and favoured growth stocks

After the extraordinary outperformance of quality and growth stocks in the first half of 2020, the market inevitably had to rebalance a few exaggerations

Since the Global Financial Crisis, Growth equities have significantly outperformed Value equities in Europe.