European equities – areas of interest: defense, construction materials, medical technology, and consumer staples
26 MAR, 2026
More relevant than ever, European equities should be treated as a distinct active allocation that can generate alpha while also acting as a diversifier relative to the U.S. in an increasingly tense geopolitical environment. We continue to find attractive idiosyncratic investment opportunities in sectors related to construction materials, infrastructure, and consumption.
Industrial sector: We believe defense companies remain well positioned for a structural bull cycle, driven by increased fiscal spending and geopolitical tensions, making them less sensitive to broader economic cycles. We also believe investors should think more broadly about domestic infrastructure. Companies producing specialized high-performance construction materials will benefit, as regulatory initiatives such as the EU Renovation Wave and the UK Future Homes Standard, along with housing shortages, drive new investment in construction and energy-efficient water systems.
Medical technology: We also see attractive opportunities in medical devices and healthcare services, supported by durable structural demand drivers such as population aging and increased use of diagnostics and laboratory testing following COVID. This translates into sustained demand for age-related solutions such as orthopedic implants, cardiovascular devices, and home monitoring. Importantly, we believe these are structural factors, with end demand being less cyclical, supported by recurring revenue streams from consumables and greater pricing power for providers offering differentiated medical services or procedures.
Consumer staples: We see attractive opportunities across a diverse set of European consumer staples companies as demand strengthens.
In the food and beverage sector, trends toward healthier eating—supported by regulation and shifting consumer preferences—are driving product reformulation toward lower sugar, salt, and saturated fat content, and higher fiber content.
Food retail remains one of the most defensive consumption segments in Europe, supported by non-discretionary demand and resilient cash flows.
As inflation has pushed consumers toward value formats and private labels, discount and convenience channels are well positioned, while continued investment in e-commerce and last-mile delivery supports the growth of a hybrid shopping model.
