Investing.com -- The current strong inflow of international capital into European equities may not continue, according to strategists at Goldman Sachs.

The team, including Lilia Peytavin, expressed skepticism about the possibility of this marking a shift towards constant buying or a substantial reallocation to Europe.

The strategists highlighted that Europe’s economic and earnings growth is slower than in other regions. They also pointed out that the region is exposed to risks, such as potential new tariffs from the United States.

Despite recent inflows, the team does not view this as over-positioning, considering it small compared to the cumulative outflows witnessed in recent years.

It’s worth noting that European stocks are currently on track for their largest quarterly outperformance against the US in history.

This trend has been driven by international investors attracted by factors such as Germany’s fiscal spending plan and lower interest rates.

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