“We’ve got a lot of positives,” Pierre Lagrange, senior advisor at Man Group, told CNBC. “You have growth that’s actually picking up, you have confidence that we haven’t had for a very, very long time in mainland Europe. We can’t forget how close we were to an absolute disaster.”

Indeed, the French election came just as the wounds were healing from last year’s Brexit vote and a general fear that the euro zone was breaking up just as the economy was starting to recover.

The recent flow of funds to the region shows investor confidence is coming back, and could be in at most its middle stages. After all, the $6.9 billion that has flowed to Europe exchange-traded funds is less than half what left last year, when most of the outflows came from actively managed mutual funds.

Carr believes “significant potential upside remains” should active and passive funds reclaim anywhere close to what they lost in flows last year.

“The bull market in European equities is in full swing,” he said.

ETFs tracking European indexes are having a big year.

Both the Vanguard FTSE Europe Index Fund ETF Shares and the country-focused iShares MSCI Germany ETF are up 15.5 percent in 2017. The U.K.-focused FTSE 100 index has risen nearly 22 percent.

Still, European stocks are relatively cheap, trading at 15.4 times earnings compared with nearly 18 times in the U.S. They’ve also outperformed domestic shares, with European indexes collectively up around 11 percent compared with the 5.5 percent rise in the S&P 500.

“The plausible bull case for Europe is that it can trade back up to those valuation levels based on falling political risk, a genuine earnings recovery and recovering inflows,” Carr said.

The key economic metric of productivity also is moving at a faster pace in Europe than the U.S. — about 1.1 percent to 0.2 percent.

Finally, fund managers surveyed this month by BofAML believe the U.S. is the most overvalued region in the world. Conversely, the euro zone is seen as one of the world’s most undervalued regions.

The managers have increased their allocation to U.K. equities, with underweight positions falling from a net 34 percent in April to 27 percent in May.

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