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European Mid-Cap Equities: Portfolio Optimizer to Achieve a Balanced Risk-Return Profile

  • Writer: PrimeAlpha Thought Leadership
    PrimeAlpha Thought Leadership
  • Jun 23, 2020
  • 2 min read

Updated: Mar 18

European Mid-Cap Equities: Portfolio Optimizer to Achieve a Balanced European Mid-Cap Equities: Portfolio Optimizer to Achieve a Balanced RiEuropean Mid-Cap Equities: Portfolio Optimizer to Achieve a Balanced Risk-Return Profilesk-Return ProfileRisk-Return Profile


Europe represents nearly one-third of the world economy, however, European equities as an asset class are largely ignored.


European equities, particularly mid-caps, represent a largely untapped opportunity for investors. Given that they comprise nearly one-third of the global economy yet are often overlooked, these equities provide an appealing environment for stock-picking, with significant market inefficiencies and pricing anomalies compared to their U.S. counterparts. European mid-caps often deliver similar growth and returns but at substantial discounts, offering attractive long-term investment prospects and a viable tool for portfolio diversification.


Investing in European mid-caps requires an active management approach due to the region's complex and varied business landscape, which includes multiple languages and differing business practices across countries. This complexity often leads to mispricing, which can be exploited by savvy investors through deep, fundamental analysis. Active stock-picking in this diverse market can achieve higher returns than passive strategies that target broader European indices, which often include sectors with lower growth potential.


Access the entire article to delve deeper into the investment opportunities and strategies in European mid-cap equities.



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Table of Contents

  • European Equity as an Ideal Stock-Picking Environment

  • Key Takeaways: Portfolio Diversification & Increasing Returns

  • What is Mid-Cap European Equity

  • What Sort of Companies Can One Find?

    • Illustration of European Global Leaders in their Respective Fields

  • Why Should Investors Invest In Europe?

  • The General European Indices Mispresent Underlying Performance

  • The Ways to Invest In Europe




Thanks to our Contributor


Lucerne Capital Management Logo


Founded in 2000, Lucerne Capital Management is an SEC-registered alternative investment firm specializing in fundamental, bottom-up stock selection with a focus on mid-cap European markets. The investment philosophy reflects a private buyer’s perspective of owning high-quality assets at attractive prices for the long-run.

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