What regions are being overlooked by investors and why?

I really like European stocks, including the UK. Now, not many people agree with me, and that is because for the last 15 years, we’ve had a pretty horrid time relative to the US. We haven’t delivered anywhere near the earnings growth or anywhere near the returns that the US market has.

And because it’s been going on quite a long time, we’ve sort of convinced ourselves that the FTSE is a bit of a dud. That we’re innately incapable. We’re just not as good. Basically, the US is really good at growing and producing good companies and growing corporate earnings, and we just aren’t capable of doing that here in Europe.

Have European stocks outperformed the US before?

But that’s not correct. If you go back to the 2000s, just a little bit further back in history, our companies were doing great. We produced stronger corporate earnings than the US. Our market outperformed the US. So we’re clearly capable, but something went wrong in the last 15 years.

Why have European stocks lagged behind the US for 15 years?

I think what went wrong was that we made different policy choices. In the US for the last 15 years, they have been cutting taxes, governments getting the chequebook out all the time and cutting corporation taxes and individual taxes. In that 15 years, when the US market did so well relative to us, the US government issued $30 trillion worth of debt. I think that played a little bit of a role in why the US economy did so well relative to ours.

We didn’t do that. Austerity, that horrible word, was the big feature of what’s been going on here in Europe for the last 10 years. What we’re starting to see now in Europe is that change. Germany is starting to spend more money. Now they can actually afford to, because their debt is quite low. So that’s all very positive.

The other thing we did here in Europe, which again was a policy choice, is we were much tighter on lots of different regulations, particularly around climate policy. A lot of what we did here in Europe was really well-intentioned. I almost think, Holly, we were really focused on the grandkids. We didn’t want to saddle them with loads of debt and a planet that wasn’t nice to live in. We were doing really good, long-sighted policy.

But I think the events of recent years have made us realise that other parties, whether it’s the US or China, aren’t necessarily doing what we’re up to. And honestly, they’re having a lot more fun.

Why could Europe’s turnaround give share prices a boost?

So the policy dialogue has changed in Europe, and I think they’ll be starting to unlock more growth. That’s going to come as a surprise, because very few investors that I meet are optimistic about Europe. Markets move because they’re surprised. They don’t move because something happens.

So if Europe does do a bit better and isn’t as rubbish as people suppose it will be, that’s going to be a surprise, and I think European stocks will respond accordingly. So that’s the unloved part of the world that I think is worth a second look.