The emerging markets' late summer rout may mean it's time to stick a toe into Europe's pool, but a cannonball off the high dive may not be on the cards.
"If investors are deserting the high risk, high return end of the risk-return curve, they're looking for currencies and for economies that are relatively stable," Steven Englander, head of Group of 10 currency strategy at Citigroup, told CNBC.
"When funds are deserting emerging markets, they don't just go into the U.S.," he added. "As strange as it sounds given the history of European peripheral debt, Europe benefits from lower commodity prices. They're a low beta economy. They have low beta asset markets."
In the week ending August 14, investors bought $2.8 billion worth of European equities, a 15-month high and the seventh straight weekly net inflow, compared with an outflow of $1.8 billion from U.S. stocks and an outflow of $570 million from emerging markets, according to a note from Jefferies. The note said foreign investors pulled $1.7 billion out of Asian equity funds over the same period.