European stocks continued their rally on Friday, spurred by hints from the European Central Bank this week that another round of quantitative easing could be on the way.
And according to one trader, the recent spike is one of many reasons to jump into European equities.
Andrew Burkly, head of portfolio strategy at Oppenheimer, said European stocks have more growth potential than domestic markets. GDP growth in Europe is still sluggish, Burkly said, and likely to pick up with further stimulus.
"They're just earlier in the recovery in the profit cycle, so relative to the U.S. there's a lot more catch-up," Burkly said Thursday on CNBC's "Trading Nation."
Corporate profits are still well below their peaks, he added, and the weakening euro will help drive further growth. The euro dropped more than 2 percent against the dollar this week as European stocks rose.
But given the fall in the euro, Burkly recommended buying an ETF such as the WisdomTree Europe Hedged Equity Fund (HEDJ), which protects against currency risk.
HEDJ has risen more than 9 percent year to date. Meanwhile, the unhedged iShares MSCI Europe ETF (IEUR) has risen 2 percent this year.
"We'd probably look to hedge that exposure a little bit, if the euro were to weaken a little bit further," Burkly said.
However, Larry McDonald of Societe Generale warned that buying European equities now could be getting into what is already a crowded trade.
"Between now and next June, 93 percent [of analysts] are telling us that the ECB will do more QE," McDonald said. "You have to ask yourself, 'How much is priced in here and how much meat is left on the bone in this trade?'"
The ECB left interest rates unchanged on Thursday, and ECB President Mario Draghi said the central bank will consider further stimulus if deemed necessary.
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