Valuation gap, growth gap and what the Swedish base currency means.

The year started well for Europe. Then came March, the oil shock and the US took the lead again. It is a pattern we have seen recur in recent years. In this Perspective we collect 13 years of data on the US, Europe and Sweden to understand what the pattern actually shows.

The US market has delivered roughly three times the return of Europe since 2013 in local currency and four times as high when converted to SEK. At the same time, the US CAPE stands at 45 compared to Europe's 23. We review the valuation gap, earnings growth in the major indices, how the US has fared during five major downturns, and what the Swedish krona has actually done to Swedish returns.

We also include Crescit's own positioning during the period — how we went from overweight Europe in January to close to 50 percent S&P 500 in mid-May, and how we thought along the way.

The analysis is not a recommendation. It is a framework for dialogue. For a Swedish portfolio, the question is not ”Europe or the US” — it is how much concentration risk you are comfortable with.