What does the EU have that the U.S. does not?

The European Union offers several assets that may provide investors with advantages not widely recognized while the United States continues to dominate in technology. Macquarie Global Strategy notes that structural changes are supporting stronger European returns, focusing on sectors where Europe holds a strong global position. These include luxury goods, tourism, and pharmaceuticals, alongside businesses adopting new technologies at comparable rates to the U.S. The luxury goods and experiences market is valued at approximately $1.6 trillion and is projected to surpass $2 trillion by 2030, led by European companies like Hermes, LVMH, and Ferrari.

Additionally, Europe generates around $1 trillion in international tourism revenue, which is about five times the level seen in the U.S. In pharmaceuticals, European and Swiss groups like Roche, Novartis, Sanofi, and Novo Nordisk compete with U.S. companies in scientific research and product development. While technology remains a visible weakness for Europe, it still accounts for about 20% of global patents.

The investment case may hinge more on adopting existing technology rather than creating it. Currently, about 37% of EU companies employ artificial intelligence, matching the U.S. in usage and often surpassing American peers in advanced digital technologies, particularly robotics. In terms of financial performance, Europe excluding the U.K. is projected to see earnings-per-share growth of around 19% in 2026, compared to roughly 12% expected in December 2025.

European equities also enjoy a higher equity risk premium discount of more than 300 basis points compared to the U.S. With a substantial pool of surplus capital and mounting pressure for higher spending, Europe presents potential drivers for improving returns on equity. The region's expected return on equity stands at about 11%, leaving room for improvement, in contrast to the S&P 500's approximately 23%.