wrote a few weeks ago for Livewire, global investors are looking to diversify from the US and Europe offers a lot of attractive opportunities.

"European equities offer a rare combination of quality and value. Robust European businesses (often founder-led with durable earnings streams) are trading at meaningful discounted valuations compared to those in the US," wrote Laurence.

Data from Schroders Australia backs this up. 

While Australia and the US trade far above their median PE ratios, Europe and the UK are trading around their historical median.

How expensive global markets are right now

Using longer-term measures like CAPE (cyclically adjusted price-to-earnings) ratios, Europe is trading at a 10% premium to its historical average while the US is trading at closer to 30%.

And even then the STOXX Europe 600 index, which tracks 600 of the largest European stocks, has also greatly outperformed the S&P 500 over the last 12 months. 

Europe is home to some of the world's leading luxury, fashion, cosmetics, car and pharmaceutical companies, and offer higher dividends than their US counterparts.

Couple that with ongoing economic growth, lowering interest rates, fiscal stimulus and a continent-wide commitment to increase defence spending to 3.5% of GDP, and it's clear why investors are flocking to Europe. 

With the ongoing war in Ukraine, bubbling geopolitical tensions and tariff uncertainty, defensive and domestic spend have become the order of the day for many of the big European powers.

"Germany has been very fiscally conservative. They're now increasing their fiscal spend by 3.5% of GDP on defence infrastructure and even tax cuts," Schroders' Sebastian Mullins told me in a recent interview.

At the recent ASX Investor Days, both Antipodes Partners and Plato Investment Management suggested European defence stocks is one area of the market they find appealing right now.

Even Europe's historical underperformers are now offering opportunities. As Mullins put it, "even the PIGS are flying". 

The PIGS in this case being Portugal, Italy, Greece and Spain - European countries that felt the full brunt of the Eurozone crisis but have borrowed sensibly when rates were low and are now growing. 

According to Copley Fund Research data, the most commonly held European stocks by global funds are:

But what's more interesting are the net flows over the last six months. 

According to Copley, here are the top five European stocks by net inflows in the 6-month period to 30 April (in US dollars):

1. Linde plc (NYSE: LIN) - $793 million
2. Spotify Technology SA (NYSE: SPOT) - $593 million

You can see the rest of the top 10 in the graph below.

You can learn more about Copley Fund Research here.