J.P. Morgan Asset Management is doubling down on Europe. At its global media summit in London, the firm laid out why the region’s policy backdrop, fiscal plans, and market valuations create a ripe moment for active investment strategies.
The event, held on 19–20 May at its historic ‘Old School’ premises, brought together executives and portfolio managers to make the case for long-term optimism on Europe. According to EMEA chief executive officer Patrick Thomson, the outlook is underpinned by the strength of institutions such as the European Central Bank, relative policy predictability, and a renewed political appetite for growth.
“Most policymakers now in Europe are very much focused on economic growth, and they’ve worked out that the industry we represent is a fantastic enabler of economic growth and productivity,” Thomson said.
Why Europe, why now?
Karen Ward, chief market strategist for EMEA, said Europe is at its best at times of crisis. “When we have a common adversary in a crisis, we come together. We shouldn’t underestimate how the policy backdrop in Europe is changing.”
Ward pointed out how the European economy is being supported by fiscal and monetary expansion. She added that governments, unlike in the U.S., hadn’t been spending but that Germany’s potential to spend is “very meaningful”, cautioning nevertheless that it remains to be seen how fast they’ll do so.
Germany’s fiscal push into areas such as defence and infrastructure, together with monetary easing across the eurozone, are being framed by J.P. Morgan as part of a broader alignment of forces that favour European assets.
Catalysts in focus
During a panel dedicated to the European outlook, equity portfolio managers Jon Ingram and Alexander Whyte highlighted a shift in sentiment. According to Morningstar data, large-cap European blend funds had attracted net inflows of 20.5 billion euros so far in 2025.
Whyte pointed to three main catalysts. First, fiscal stimulus and the “generational turning point” in terms of willingness to spend in Europe, with Germany at the forefront. This, he argued, will have a spillover effect in that reindustrialisation and spending on infrastructure will be “a huge driver of returns”.
Second, monetary policy. Lower inflation frees the path for fiscal and monetary policy to better align. Third, consumers. Whyte argued that U.S. consumers had been a massive driver to U.S. exceptionalism, but questioned whether European consumers could also pick up the pace here.
The pair also argued that exciting opportunities weren’t just in the U.S. and that European banking, tech and small-cap stocks were particularly attractive. They showed how euro banks have been outperforming the so-called “Magnificent Seven” high-performance tech stocks, as well as how European banks were more profitable and cheaper than U.S. ones. Additionally, they argued that European tech is appealing in the sense that “there are some companies in interesting, niche areas which are not spending the massive amounts of money as their American counterparts”.
Cash on the sidelines
According to the Association of the Luxembourg Fund Industry (Alfi), European households hold about 10,000 billion euros — or 41 percent of their wealth — in cash and savings. By comparison, U.S. households hold 13,000 billion euros, or 16 percent, in similar instruments.
Ward warned that cash isn’t as tempting as it used to be.
“Interest rates are rapidly disappearing. In fact, in Europe already, we believe that it’s a negative real rate: you’re losing money. And one of the things we’re constantly trying to get, particularly our retail clients, to remember is to think in real terms. What is inflation doing to the value of your cash?”
She urged investment and made the case for being global, active and adding bonds and alternatives for a well-balanced portfolio. Even in cases of historical shocks, such as the Covid-19 pandemic and Brexit, one-year and three-year returns of balanced portfolios tended to outperform cash. Resilience can be added with fixed income and alternatives.
Making the case for active
Despite reassessments and uncertainty surrounding the fallout of the U.S. administration’s so-called “liberation day”, EMEA CEO Thomson noted it’s important to take a long-term view on investing.
“What our clients are telling us is volatility brings opportunity,” he said. “It’s a fantastic time for active management because we’re seeing uncorrelated returns, a lot of volatility, a lot of unexpected risks, unexpected consequences to policy shifts.”
Ward agreed that active investing has become an “important narrative” for her recently and that many of the benchmarks have “changed dramatically” and are “highly concentrated”.
Thomson explained that active ETFs are a fast-growing area. “We’re lucky enough to have captured almost 40 percent market share here in Europe; we’ve got about 37 billion dollars. It’s growing fast and it’s an innovative new product. I’m very excited about what’s happening in the world of active ETFs,” he added.
In the active space, J.P. Morgan Asset Management as of end January 2025 managed 35 active Ucits ETFs totalling 32.2 billion dollars in assets under management. The company spends around 480 million dollars per year on research to support active management.
Further reading on Investment Officer Luxembourg:
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