‘Structural winners’ from the COVID-19 crisis in the US outnumber those in the Eurozone by almost three to one.

This is according to analysis by NN Investment partners (NN IP). As a result, US equities offer more value versus their European peers despite looking more expensive at the index level, the firm said.

The structural winners from the COVID-19 crisis, especially including stocks in technology, telecommunication services and online sales, have larger index weightings than they do in Europe. Almost 20 percent of the stock indices in the US is represented by the five largest large-cap tech + names, while the whole European tech sector is only 6 percent of the index.

US equity valuations become much less frightening if the differences in sector compositions are factored in, NN IP analysis shows. For example, US tech is 27.0 on a trailing price-to-earnings basis, versus 33.8 in the Eurozone, while US financials have a P/E of 9.8 versus 6.9 for their Eurozone counterparts.

Ewout van Schaick, Head of Multi Asset, NN Investment Partners said: “A much larger section of US companies is benefiting from the current environment than in Europe. Furthermore, Europe has a very large financial sector, which is one of the big problem areas of this crisis.

“The differences in valuations makes us confident that the US equity market still has room to move higher, while the room for the European market is pretty limited at present.”