A recent article in Bloomberg reports that Manulife Investment Management is on the brink of overweighting European stocks after the region’s equities saw the worst tumble in more than three years.

The dip comes in the wake of “messy politics in the U.K. and Italy combined with the fallout from U.S.-China trade tensions,” the article reports, adding comments from JPMorgan Chase that the region’s stocks are unlikely to outperform the U.S. unless they can outpace the earnings growth of American companies.

Manulife, the global wealth management arm of Toronto-based Manulife Financial Corp., manages $837 billion in assets. Regarding the firm’s contrarian strategy, the article quoted its global head of asset allocation, Nathan Thooft: “A lot of negative news is priced in, flows have been very negative, and valuations are supportive. At the margin, we’re starting to think European equities are settling up to look for a better performance in the coming year or so.” The article reports that most of the investment community has seen “relentless” outflows since March 2018 from funds focused on European equities and further that, according to a Bloomberg poll, the Stoxx Europe 600 Index is anticipated to drop 2.3% by the end of this year.

But according to Thooft, “If you have a longer-term horizon, I’m pretty confident in saying that over the next several years, Europe probably offers better opportunities than the U.S. It’s just a question of when and it’s a question of what’s going to be the catalyst that shifts the mindset, because right now if you look at the flow dynamics, no one loves European equities. And at some point in time, it can’t get much worse.”