Many investors are scared off by Europe, given potential risks from populist uprisings and questions about the future of the European Union (EU). But Brian Singer, head of the William Blair Dynamic Allocation Strategies team, says now is the time to gain exposure to European banks in a recent TV interview with Barron’s Senior Editor Jack Hough.

Singer noted that European banks have been significantly battered in the global financial crisis and again in the 2011-2012 European debt crisis, which has created a difficult environment for investors to step into this market and sector. Currently, however, European banks are priced well below fundamental value, Singer told Barron’s. In fact, he believes it’s the most fundamentally attractive sector in the Eurozone.

“Also, investors are very fearful of any downside risk, and that’s the sector where they’ve experienced [downside risk] more recently, which gives them another reason to avoid it,” Singer said in the interview.

At the same time, Singer highlighted that the regulatory environment for banks is turning more favorable as the regulators recognize the need to help strengthen the banks, especially as key institutions, such as the European Monetary Union, grow concerned about another EU member might leave.

Overall, Singer told Barron’s that he believes Europe is more attractive than the U.S. equity market. And, while banks is his most favorite sector, he has major concerns about Italian banks, many of which aren’t solvent. Spain remains his most favorite country in Europe—again, because it’s the most fundamentally attractive (the greatest discrepancy between price and fundamental value).

“[Spain] has made tremendous progress since 2011 regarding important reforms to its labor flexibility,” Singer said in the Barron’s interview. “They still have a long way to go, but they’ve done a lot more than I think the market has appreciated.”

Singer also highlighted his positive outlook on European financials and Spain in another recent interview on CNBC’s “Closing Bell” program with anchors Bill Griffeth and Kelly Evans. In that CNBC interview, Singer said that central banks are starting to normalize their balance sheets, which allows prices to revert back to fundamental values.

Watch Brian Singer’s Barron’s interview

Watch Brian Singer’s CNBC “Closing Bell” appearance

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Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Investments are subject to market risk. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

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Copyright © 2017 William Blair & Company, L.L.C. "William Blair” is a registered trademark of William Blair & Company, L.L.C. No part of this material may be reproduced in any form, or referred to in any other publication, without express written consent.

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Please carefully consider the Funds’ investment objective, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus, which you may obtain by calling +1 800 742 7272. Read it carefully before you invest or send money. Investing includes the risk of loss.

Any statements or opinions expressed are those of the author as of the date of publication, are subject to change without notice as economic and markets conditions dictate, and may not reflect the opinions of other investment teams within William Blair Investment Management, LLC or the Investment Management Division of William Blair & Company, L.L.C.

This content is for informational and educational purposes only and not intended as investment advice or a recommendation to buy or sell any security. Investment advice and recommendations can be provided only after careful consideration of an investor’s objectives, guidelines, and restrictions.

Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Investments are subject to market risk. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

William Blair does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax questions and concerns.

Distributed by William Blair & Company, L.L.C., member FINRA/SIPC.

Copyright © 2017 William Blair & Company, L.L.C. "William Blair” is a registered trademark of William Blair & Company, L.L.C. No part of this material may be reproduced in any form, or referred to in any other publication, without express written consent.

Statement of Financial Condition | NMS Rule 605 & 606 | Business Continuity Plan | UK Stewardship Code
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