There is currently a slew of attractive value investing opportunities on stock markets around the world, and particularly in Europe, investment managers with Franklin Templeton Investments Corp. said on Thursday.

At the company’s annual Investment Outlook and Opportunities Forum in Toronto, fund managers encouraged advisors to take advantage of attractive valuations in global equities to diversify clients’ equity holdings.

Lisa Myers, lead manager of the Templeton Growth Fund, Ltd., which is sponsored by Franklin Templeton Investments, noted that Canadian investors tend to have a strong home bias, which leads to a high concentration of exposure to commodities. She said advisors should help clients understand the importance of diversifying their equity holdings.

“With that kind of concentration and correlation of the Canadian market and dollar to commodities so reliant on other countries, can we as Canadian investors afford to have such concentrated exposure?” Myers said.

Regionally, she sees strong investment opportunities in the U.S., Europe, and emerging markets. On a price-to-earnings basis, Myers said stocks in the U.S. and Europe are trading at a 30% to 35% discount to their historic averages. Emerging market stocks are trading at or around their historical averages, but carry the potential for much stronger and consistent growth.

“The price is right,” she said.

While many European countries are facing challenging fiscal and economic conditions, the fund managers said that some companies in this region are actually performing very well.

“We firmly believe that crisis creates opportunities,” said Phillipe Brugère-Trélat, co-lead manager of the Mutual Discovery Fund, which is sponsored by Franklin Templeton Investments.

Brad Radin, lead manager of the Templeton Global Smaller Companies Fund, which is sponsored by Franklin Templeton Investments, agreed: “We like situations where there is turmoil, where there is uncertainty,” he said, “that leads to value opportunities.”

The managers said European companies with widespread international exposure are performing particularly well. Companies engaged in exporting, they pointed out, are benefiting from the weaker euro.

“Exports are a very important part of European GDP,” noted Brugère-Trélat.

Don Reed, president and CEO of Franklin Templeton Investments Corp. and lead manager of the Templeton International Stock Fund, which is sponsored by Franklin Templeton Investments, agreed that Europe presents attractive opportunities. He sees particularly promising plays in the Netherlands, Norway and Britain.

Sector-wise, Myers said she currently sees the best value in consumer discretionary, information technology, health care and telecommunication stocks.

IE