Europe was in stark focus at the start of the year as investors fretted about the ramifications of a series of elections amid a feared shift to populism which had already taken root elsewhere.
Fast-forward to the middle of the year and investors have breathed a collective sigh of relief. Emmanuel Macron crushed Marine Le Pen, while Mark Rutte saw off Geert Wilders. The election in Germany is still to come and is the biggest of them all, but chancellor Angela Merkel’s re-election prospects mean that is considered a far safer poll with minimal risk of populism winning.
Europe has been a distracting place because of political risks but with that story now ending, investors should be focusing on the underlying economic picture - and how individual companies are progressing - rather than on the electorate.
The eurozone bloc is on track to grow at just under 2 per cent in 2017, with some of the more challenged economies also in positive territory as the recovery broadens.
Earnings growth for Europe plc is also back after a hiatus in 2016, and could be as high as 10 per cent in 2017 if forecasts are to be believed, with similar levels pencilled in for 2018.
The market has been too optimistic over the past few years and 2017 may prove to be no different, but it does seem better founded this time, especially with the political risk all but removed.
Compare Europe to the UK now and the contrast could not be starker. Europe, finally recovering from the events of Greece and others which tested the very fabric of the union, now looks quite grown-up, with Brexit seemingly galvanising the members to work more closely together. The UK, on the other hand, appears to have shot itself in the foot.
However, it would be a mistake to assume Europe is out of the woods. The recovery is now broad, but it is not deep. European consumers are still beset by many issues, with unemployment running at 9 per cent. This is, believe it or not, an improvement on recent years, representing the lowest figure since 2009, but it remains a high figure in a global context.
Many in employment are also “under-employed”, working less hours than they would like and thus removing any form of collective bargaining power they might have with employers. This is and will continue to keep a lid on consumer spending, and that means the individual companies that investors buy in Europe remains paramount. 
For us it is about finding companies with formidable and unassailable competitive advantages because while Europe has recovered, we believe it will not be enough to propel corporate profits higher for a number of years.
That means owning businesses which have strong and growing revenues and pricing power, and which are reinvesting in their own operations to maintain that revenue growth. In short, they are businesses which can grow on their own regardless of the economic backdrop.
In the fund, we believe that translates to stocks such as Ryanair and Ferrari. Looking at Ryanair more closely, it has continued to increase its cost advantage versus the competition, as evidenced by the 5 per cent decline in its non-fuel unit costs. With this in mind, we are confident that Ryanair can continue to grow its market share as both the legacy carriers and the low-cost airlines struggle to compete with it.
Ferrari is another stock that has been building on its position of strength. Quite apart from the power of the brand, we would highlight the scope that we see for the company to grow its unit sales as well as its average selling prices in the years to come. Moreover, we believe the downside risk for sales to be low, thanks to a healthy waiting list as well the majority of its sales coming from repeat customers. Indeed, we consider Ferrari to have more scope to raise prices than it has so far practiced.
Although both of the above, and many other companies within the fund, have seen share prices march relentlessly higher, we believe these stocks are worthy of such valuations for the simple fact that they can grow their cashflows when others cannot.
The risk to such businesses is that the backdrop they are operating in exposes their valuations versus more economically sensitive companies. The return of inflation, for example, would be such a change and could force the hand of central banks and push up interest rates.
That would change the scenario for a number of sectors including banks, which need higher rates to generate higher profits, and which are currently our largest underweight.
However, we are not expecting such a shift any time soon. With official eurozone inflation currently at 1.3 per cent, well below its target of around 2 per cent, signs of inflationary pressure remain scarce. Indeed the May figure does not herald a tightening of policy, even if the economic risks are no longer skewed to the downside. Quantitative easing, currently running at €60bn a month, is therefore unlikely to be tapered down until the end of the year at the earliest, and it is very unlikely the European Central Bank contemplates any kind of tightening by way of a rate hike until the second half of 2018.
That means pricing power remains paramount - those expecting the end of political risk to create a sudden surge in growth and inflation are likely to be disappointed.
Rory Powe is manager of the Man GLG Continental European Growth fund. All views are his own and should not be taken as investment advice.