Stock markets around the world have been on a tear over the past few years. But now that the bull runs in the U.S. and in many emerging-market economies are beginning to look tired, investors may want to turn to the Old World.
Yes, Europe has had nice run as well. But the economy isn't as far along in the economic cycle as the U.S., and many European companies are still undervalued, relative to their U.S. counterparts. So the rally should still have some legs, say some fund managers.
"The European economy is accelerating as the U.S. economy slows," says Clas Olsson, co-lead manager of the $1.62 billion (AEDEX Quote)AIM European Growth Fund (AEDEX).
Olsson points out that the price-to-earnings ratio 
of the Stoxx 600, which represents 600 large-, mid- and small-cap companies across 18 European countires, is just 14, on the basis of earnings estimates for 2007. That compares with a P/E of 16 for the S&P 500.
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