Investors need to be cautious on rotating into European equities, according to the CEO of an independent asset management group, who urged people not to get carried away with one of the main investment stories of the year so far.
"It's fascinating: everybody is moving from the U.S. into Europe," Alexander Friedman, CEO of Swiss-based GAM Holding, told CNBC Wednesday.
"I would caution that it might be overly positive. Because there is a huge amount of policy risk that hasn't been priced into the market."
U.S.-focused research tracker TrimTabs said Sunday that investors have been "shoveling record sums" into European equities this year, while shunning their U.S. counterparts. Warren Buffett has also been more bullish on the continent recently, snapping up a German motorcycle accessories retailer.
Meanwhile, Mohamed El-Erian, chief economic adviser at Allianz, called this focus the "only game in town" on Monday, as the European Central Bank (ECB) prepares to pump 60 billion euros ($67 billion) into the region's economy this month.