It appears that equities are finally making a sustained comeback with European investors.

Fixed income, which has enjoyed much popularity as a ‘safe haven’ status since the financial crisis broke, could be the one to suffer in 2013—with bonds continuing to deliver meager yields—as investors look to edge back into equities, which, according to some analysts, look relatively cheap compared to other asset classes.

According to new figures released by the Investment Management Association (IMA), a U.K. buy-side trade body representing around £4.2 trillion funds under management, equities were the best-selling asset class for the third month running in November.

While fixed income sales were at their lowest level since October 2008—one month after the collapse of U.S. investment bank Lehman Brothers—with the corporate bond sector seeing significant outflows.

“Equity funds were the strongest sellers for a third month in a row,” said Daniel Godfrey, chief executive of the IMA. “This is partly due to investors preferring equity income over fixed income for income generation.”

Despite continued macroeconomic and political uncertainty—with the fudging of the U.S. ‘fiscal cliff’ deal, the continued long-term fears over the health of the eurozone and the ratcheting up of tensions in the Middle East—some analysts still see equities as the must-have asset class of 2013.

“Equities remain exceptionally cheap and under-owned versus other asset classes, so there is potential for solid gains to be made in 2013,” said James Griffin, manager of the Fidelity MoneyBuilder Growth Fund for investment manager Fidelity Worldwide Investment.

Griffin, though, offered a note of caution. “Recent mixed corporate results have demonstrated that it will not be plain sailing for equities,” he said.

Although as some of the potential banana skins of 2012 sail into the distance—such as the U.S. election and the Chinese leadership transition—and a more pro-active approach by central banks in both Europe and the U.S., it seems that the more risky asset class of equities could possibly take center stage once more.

“Equities generally look attractively valued both relative to bonds and their long-term trends,” said Jason Hollands, managing director, business development and communications, at Bestinvest, an investment adviser.

“The combination of cheap equity valuations, attractive dividend yields and gradually improving market confidence should be supportive for equities in 2013 and beyond.”

However, bouts of high volatility, which plagued the markets for much of 2012 as markets bounced from one crisis to the next, could be around for a while yet. Although other analysts believe that Mario Draghi’s plea in July last year when the head of the European Central Bank (ECB) said he would do “whatever it takes” to hold the eurozone together, may actually mean that investors could profit from any spike in volatility in 2013.

“We are likely to see periodic flare-ups in the euro crisis and volatility stemming from high debt levels in the U.S. and U.K.,” said Aruna Karunathilake, manager of Fidelity Worldwide Investment’s Fidelity UK Select Fund.

“Such volatility is likely to create opportunity; with valuations at attractive levels and the tail risk of a worse-case scenario in Europe alleviated through the ECB’s OMT [Outright Monetary Transactions] program, there is good reason to expect equities to move higher in 2013.”

But not all analysts predict a rosy outcome in Europe this coming year with recent eurozone unemployment figures, which revealed staggering levels of youth unemployment in countries such as Spain and Greece, showing a continent still straddled with underlying problems.

“Economic crisis in developed countries have reinforced unemployment, especially with the youth,” said French bank Societe Generale in a note to clients earlier this week.

“In 2013, southern economies plagued with large unemployment will remain in a recession marked by a lack of consumer confidence and greater poverty.”