Most expensive stocks prove surprising haven in European slump

London

IN the last quarter when European equities saw the most volatility in three years and the worst returns in four, investors did something that might seem strange: they bought high.

Companies with the loftiest valuations, a group that includes stable profit generators such as Roche Holding AG and L'Oreal SA, beat a basket of cheap stocks by the most on record in the period, data compiled by Morgan Stanley and Bloomberg shows. It happened as a gauge of price swings jumped 34 per cent above its three-year average and shares fell 11 per cent.