Europe is one of the best places to invest now given economic improvement there. But Britain may offer the best bargains because its Brexit vote later this month could trigger fear-selling and volatility.

This isn’t wishful thinking. Greece’s potential exit from the European Union last year caused broad stock market sell-offs in key income sectors.

Meanwhile, the eurozone has started to shake off its economic torpor. Revised figures showed annual growth for gross domestic product there edged higher to 1.7%, according to the Guardian. The 19-nation eurozone grew at its fastest pace in a year in the first quarter of 2016.

Eurostat, the official data agency for the European Union, said that an increase in investment was among the biggest factors in the boost to GDP across the zone along with a rise in exports of 0.4%.

Domino Effect?

Could the Brexit cause real damage? Some commentators fear a domino effect where other countries follow Britain’s exit, causing the eurozone to break up. It’s possible, but given that most of our holdings do business in many countries, we don’t think that would hurt the portfolio. And the dominos would fall in slow motion—over years—so we’d have plenty of time to adjust our portfolio accordingly.

As I’ve said, though, any dips should be viewed as buying opportunities only for our Conservative Portfolio holdings, which can bounce back the best from such disruptions. 

Aggressive Portfolio

Our Aggressive Portfolio is more sensitive to global growth changes and market volatility. We believe the portfolio will outperform when global growth returns, but in the meantime we’ve had to contend with high share price volatility that we believe has had nothing to do with fundamentals but instead is a result of fear-selling in the broad market.

So while most of our holdings are profitable, their prices have been unfairly depressed.

 That said, only investors who can bear high volatility should bargain hunt among Aggressive Portfolio holdings this summer, which promises to be an especially wild one for the markets.

If you’re game, there could be some great bargains. To help you shop for them, we’ll review our Aggressive holdings using Global Income Edge’s proprietary hybrid Dupont model, called the Early Warning System. This system deconstructs a company’s return on equity into its individual components, which allows for greater ease in analyzing what’s actually driving growth. In addition to identifying promising investments, this system alerts us to declining margins and rising leverage.

The Aggressive Portfolio is made up of companies from countries that will be the first to benefit from an uptick in global growth. Here’s a look at those holdings, sector by sector:

Energy Infrastructure

Today, there’s a vital need to replace aging infrastructure for electricity, natural gas and water.

Macquarie Infrastructure (NYSE: MIC) owns a diversified group of infrastructure businesses, including the largest bulk-storage terminal business in the U.S., a gas production and distribution business, and a controlling interest in two district energy businesses.

Dupont model results: Macquarie experienced some losses for two quarters in 2015, but for the last three quarters the firm has been delivering an average 5.47% net profit margin and a 1% return on equity.  S&P Capital IQ consensus estimates are for a double-digit uptick in net income margins in 2016, 2017 and 2018.

With a dividend yield of 6.53%, Macquarie Infrastructure remains a Buy up to $90.

Global Player ABB (NYSE: ABB) gets about 50% of its earnings from the developing world. The firm specializes in power-transmission distribution and power plant automation. As developing nations continue to build their energy infrastructure, they will turn to ABB.

Dupont model results: Despite a weak quarter at the end of 2015, ABB has posted a solid net profit margin that averaged 6%, with not a single negative return on equity, which averaged 3.51%, in over 12 quarters.

With a dividend yield of 3.59%, ABB is a Buy up to $30.

Banks and Financials

For income investors, the size and balance sheets of global banks and financial companies offer dividend stability while tapping economic growth in countries around the world.

Alliance Bernstein Holdings (NYSE: AB) is one of our wealth management demographic plays; increasingly baby boomers and a growing emerging markets middle class will need financial advice on their pensions.  In addition to serving retail investors, whose cash accounts for about a third of the company’s $474 billion of assets under management (AUM), the company also serves institutional investors (50% of AUM) and high-net-worth private clients (16%).

Dupont model results: Alliance Bernstein has had not a single negative return on equity in more than 12 quarters, and its net profit margin has stayed within 80% to 90%. The company’s average return on equity has been between 2% and 3% for that period.

We are elevating Alliance Bernstein Holdings from a Hold to a Buy.

Banco Bradesco (NYSE: BBD) is the second-largest bank in Brazil and is a play on emerging markets growth. The banks’ shares have taken a beating after the recent political upheaval surrounding Brazil’s embattled president and the slowing down of growth in commodity-sensitive countries such as Brazil. We have seen some political stability return, and a slight improvement in commodities gives us hope that Brazil’s prospects are getting brighter.

Dupont model results: Banco Bradesco averaged net profit margins of 30% over the last 12 quarters, though in the last quarter it dropped to 19%, which appears seasonal. However, the bank’s debt position also declined. The bank has maintained an average positive return on equity of 4.8% during 12 quarters. 

Banco Bradesco is a Hold.

Banco Santander (NYSE: SAN), headquartered in Spain, is one of Europe’s largest banks with diversified holdings in the U.S., Latin America, Singapore, Hong Kong and Africa. With trillions in assets, Santander has been ranked 43^rd in the Forbes Global 2000 list of the world’s largest companies.

Dupont model results: Though net profit margins were low earlier this year due to global market volatility, the bank’s net profit margin rebounded to 19% in the last quarter which is consistent with its earnings performance over the last few quarters. Notwithstanding, the firm’s return on equity has been somewhat muted, averaging 1.57% over the last seven quarters.

Banco Santander is a Hold.

Royal Bank of Canada’s (NYSE: RY.PRS) preferred shares came to us when the bank acquired former bank powerhouse City National (NYSE: CYNPRC), which offered a 5% yield. We continue to believe Royal Bank is one of Canada’s strongest despite headwinds from declines in oil prices that have affected the country’s energy industry.

Dupont model results: Royal Bank of Canada’s net profit margin has averaged 28% over the last 12 quarters, and its return on equity has averaged 4% over the same period, during which the company’s debt also declined. There has not been a single negative return on equity for that period. 

With a dividend yield of 5%, Royal Bank of Canada’s preferred shares are a Buy up to $30.

UBS Group AG (NYSE: UBS) was one of the first European investment banks to restructure and anticipate a move to wealth management. As with Alliance Bernstein, we believe this is a growth business given demographic trends.

Dupont model results: UBS has had an average net profit margin of 14.84% for the last 12 quarters. The bank has not had a negative return on equity, posting an average 2% ROE for the last 12 quarters.

Credit rater S&P Global Ratings recently upgraded UBS’s credit rating because of the bank’s successful strategy to reduce its debt. UBS was raised from a BBB+ to A-, the seventh-highest investment grade, according to a Bloomberg report. S&P also stated that UBS should be able to deliver “satisfactory” returns for investors without further changes to the bank’s plan to focus on wealth management, first announced in 2012.

With a dividend of 5.88%, UBS Group AG is upgraded from a Hold to a Buy to $25.

Westpac Banking (NYSE: WBK) is one of Australia’s top four banks and was selected originally as a way for investors to have exposure to growth in Asian markets as well as Australia, its biggest market.

Dupont model results: Westpac has had an average of 38% net profit margins over the last 12 quarters, a reduction in debt, and an impressive 3.71% average return on equity over the same period.

Given unpredictable markets and higher volatility in the pacific region presently, Westpac Banking is a Hold.

HSBC Holdings (NYSE: HSBC) is the world’s second-largest bank, with roughly $2.7 trillion in assets and more than 60 million customers in 81 countries. Because the decline in Asian markets hurt the bank, it is currently undergoing a significant restructuring and has been laying off employees and closing branches.

Dupont model results: HSBC experienced a decline in return on equity, posting -0.67% return on equity and a 13% drop in net profit margin in the last quarter of 2015. The company has since rebounded with a 3% jump in net profit margin and a 2.15% return on equity; however, because the firm showed an increase in leverage during the period, we would advise discounting the improvement in ROE.

Given unpredictable markets and higher volatility in the pacific region presently, HSBC is a Hold.

Other Sectors

We’ve added investments in funeral homes such as Hillenbrand (NYSE: HI), in biotech such as PDL Biopharma (NYSE: PDLI), in industrials or healthcare technology such as Koninklijke Philips N.V (NYSE: PHG), consumer hotels such as Intercontinental Hotels Group (NYSE: IHG) and shipping such as Seaspan (NYSE: SSW).

Dupont model results: For the most part, these holdings have all had 12 quarters of positive net profit margin. The only holding to experience some weakness in net profit margin was Koninklijke Philips N.V (NYSE: PHG), which had a bad last quarter in 2015 related to the sale of its lighting division. In the last quarter, though, the company’s net profit margin and ROE returned to health, but we would like to see more improvement.

Please see the table section in the back for advice as some of these holdings are on hold given recent market volatility.