Report
The potential for portfolio rotation into equities is considerable in the euro zone
Equity return s and valuation s are lower in the euro zone than in the United States for two reasons: The magnitude of share buybacks in the United States ; The weak demand for equities in the euro zone due to savers’ high risk aversion. But the return on risk-free bonds will now be negative for many years: this may lead savers to turn to equities much more than before and, when comparing the euro zone and the United States , we see the considerable potential for portfolio rotation into equities in the euro zone. The possibility of European equities catching up in terms of valuation is therefore a hypothesis that must be taken seriously.
Provider
Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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