Honestly, no asset class makes euro-zone investors dream

At present in the euro zone: Interest rates on risk-free government bonds are abnormally low ; Even though the equity risk premium is high, equities are negatively affected by the high volatility of share prices and by uncertainty about growth and earnings; For risky corporate bonds, risk premia do not cover default risk; Risk premia on real estate have fallen sharply; Even though emerging countries’ interest rates in local currency are high, a high currency risk is having a negative impact on emerging-country bonds; The valuation of companies in LBOs is high, making leveraged loans and CLOs less attractive. It is therefore understandable that investors may have no enthusiasm for any asset class. Intrinsically, equities remain the least expensive.