Is it time to buy Europe? While many commentators suggest it, the answer is surely no. Even if you disagree with my view that Europe’s 25 per cent price/earnings discount to US shares is insufficient, the comparison remains stark. US equity valuations might seem "nuttier than bonkers," but Europe’s top companies simply do not shine as brightly as their American counterparts.

When looking at large-cap companies, the disparity is evident. Developed Europe ex-UK has 84 companies with a market cap above $50bn, with a mean return on equity of 19 per cent. In contrast, the US has 288 companies of that size or larger with an average ROE of almost 30 per cent. Even if you narrow the US pool to 84 stocks, the average ROE jumps to 37 per cent.

Whether you choose an ETF based on the Euro Stoxx 50, MSCI EMU, or FTSE Developed Europe ex-UK, the results are remarkably similar. Ownership of the top 50 names versus 400 makes little difference to long-term returns. For now, I will remain on the sidelines while others get excited about Europe.