The equity risk premium has effectively vanished. While it is a signal worth heeding, it is not cause for immediate alarm, particularly for portfolios that are genuinely diversified.
European equities are often viewed through a narrow macro lens, driven primarily by euro-area growth expectations. However, this perspective understates their true potential. Today’s European equity market represents a diversified, innovation-driven and globally connected opportunity set, offering investors access to high-quality companies with competitive advantages, attractive valuations and long-term structural growth drivers.
As the AI story moves from training large language models to delivering myriad “agentic” applications, we believe investors have an opportunity to capitalize on this crucial shift.