NEW YORK ( TheStreet ) -- After plummeting during the worst days of the euro crisis, European markets have rallied.During the past year, European stock funds returned 33.1%, compared to 28.7% for the S&P 500, according to Morningstar.
The rebound in European stock markets began last July. At the time, investors fretted that the euro could collapse as countries such as Greece abandoned the currency. To stem the panic, Mario Draghi, president of the European Central Bank, pledged to do "whatever it takes" to save the currency union. The bold statement calmed the markets, and investors raced to buy stocks. To bet on a European revival, consider Federated International Leaders. While portfolio manager Marc Halperin can invest anywhere in the world, he currently has 83% of assets in Europe, a big overweight for the fund. A diehard value investor, Halperin looks for strong businesses that sell for big discounts. Most often the contrarian approach has succeeded. During the past five years, the fund returned 4.4% annually, outdoing the average foreign large blend fund by six percentage points. Halperin is keen on European employment agencies. Holdings include Adecco (AHEXY), a Swiss operation, and Michael Page (MPGPF), based in the UK. The earnings and stock prices of the agencies sank as job markets collapsed. But Halperin argues that the outlook will soon improve. "Once the economy revives, firms will start hiring again, and the employment agencies should do well," he says.