Nearly 60% of APAC investors favour Europe's long-term opportunities over other regions
Marketing Communication - For professional and institutional investors only.
For years, investors across Asia Pacific (APAC) have favoured the US and emerging Asia over Europe in their portfolio allocations. But a decisive sentiment shift is now underway.
According to Europe Rising: The 2025 APAC Investor Pulse, a proprietary survey by BNP Paribas Asset Management conducted between August and September 2025, three-quarters of investment professionals plan to increase European exposure in the coming 12 months.
In fact, 71% of investment professionals across Australia, Hong Kong, Japan and Singapore now view Europe’s investment outlook more positively than they did a year ago. Close to 60% believe Europe offers better long-term investment opportunities than the US, China, Southeast Asia or India.
“A confluence of factors has improved Europe’s attractiveness,” Daniel Morris, chief market strategist, BNP Paribas Asset Management, said. “Compared to the US, Europe has stabilised inflation. The policy outlook has become clearer and more consistent. This combination creates a more favourable backdrop for both equity valuations and credit conditions. And we are now seeing this shift translating into concrete allocation decisions.”
European equities: compelling value meets long-term vision
At the heart of investor conviction is valuation. The MSCI Europe index is trading at a significant discount to the S&P 500, despite comparable earnings potential. This valuation gap, combined with strong fundamentals, explains why 80% of the investment professionals in the BNP Paribas Asset Management survey say European companies delivered stronger than expected performance in the first half of 2025 and are well-positioned to sustain this momentum.
Earnings forecasts remain robust across high-impact industries – including biotechnology, semiconductors, aerospace and defence – reflecting Europe’s growing innovation edge.
Meanwhile, Europe is entering a new fiscal era. Germany’s €500 billion Special Fund for Infrastructure and Climate Neutrality and broader EU initiatives across infrastructure, energy transition and industrial competitiveness are reshaping the region’s long-term economic foundation, with 80% of survey respondents believing such measures will enhance Europe’s global competitiveness.
European fixed income: stability in a shifting rate environment
European fixed income is gaining prominence as a source of both income and stability. The European Central Bank’s credibility and policy clarity reinforce investor confidence and provide a favourable backdrop for the broader fixed income landscape.
Among fixed income opportunities, euro-denominated investment-grade corporate bonds and high-yield short-duration bonds emerged among the top three preferred approaches to accessing the European market in our survey – valued for their strong fundamentals and role in diversified income strategies. The resilience of Eurozone corporates – driven by deleveraging, margin discipline, and stable cash flows – supports this appeal.
In addition, short-duration instruments and selective high-yield bonds also present attractive opportunities in the current environment.
Strategic partnership: navigating Europe with local expertise
Overall, the 2025 APAC Investor Pulse survey signals a marked shift, with APAC investment professionals now viewing European markets as a dynamic driver of returns rather than a defensive allocation. To take advantage of the region’s opportunities, on-the-ground expertise is vital.
BNP Paribas Asset Management, the second-largest asset manager in the EU*, combines global institutional experience with decades of European specialisation to help APAC investors access and implement European exposures in this evolving landscape.
Visit BNP Paribas Asset Management’s website for more insights:
Contact your BNP Paribas Asset Management representative to learn more about our European strategies.
*Source: UK excluded, estimate of combined assets including BNPP AM, AXA IM, BNPP REIM and assets delegated by Cardif. IPE Top 500 Asset Managers 2025 ranking.
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