Nonetheless, 2016 was a mixed year for Europe's stocks. The European Stoxx 600 finished the year 1.2 percent lower than from the start. But 2017 has seen something of a turnaround. Year-to-date, the Stoxx 600 is 2.15 percent, while some indexes, such as the U.K.'s FTSE 100, have seen fresh all-time highs this year.
Charles Newsome, divisional director at Investec, told CNBC's Squawk Box that clients should be reasonably fully invested in equities overall, which enjoyed a strong run at the end of 2016 and beginning of 2017, but warned against investing in Europe.
"How we invest going through the next process of Brexit is obviously very difficult to work out. I'm not completely convinced of what the right moves are just yet, the election in France is going to be fascinating and Germany, with in my opinion what looks like a slightly misplaced currency for them, is desperate to hold the European Union together," he said.
"I continue to believe, and I know there's been a little bit of a resurgence in interest in Europe lately, that people should be careful about investing in Europe for the time being."
In contrast, Jaisal Pastakia, investment manager at Heartwood Investment Management, maintained its view on being overweight in European equities.
Europe benefits from a stabilizing economic backdrop, supportive credit growth, rising inflation and improving earnings growth, Pastakia wrote last week.
"Earnings-per-share growth turned positive in most regions in the third quarter of 2016, following four consecutive quarters of contraction. Financials and commodities are now expected to contribute positively to the aggregate earnings picture, with a weaker euro also helping exporters," he said in a note.
"Investing in European equities is not necessarily for the faint-hearted, but we believe there is scope for this market to outperform this year."
Richard Turnill, global chief investment strategist at BlackRock, echoed Pastakia's view by upgrading European equities to overweight from neutral in BlackRock's weekly commentary report for February 6.
Also, according to BlackRock, Europe is set to benefit from U.S. led reflation.
However, it added, some investors are being too skeptical over the region's prospects and too nervous when it comes to the outcomes of this year's elections.
"We believe European equities should benefit in such a reflation scenario, absent any other shocks. European earnings have historically been more sensitive to global economy pick-ups than U.S. counterparts, given European firms' lower margins and large revenue exposure to global and emerging markets," the BlackRock report said.
"Yet economic and political shocks have kept investors overly cautious toward European equities, in our view. We believe the political risk priced into European markets around upcoming French and German elections is overstated."
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