Europe

Decades of Data: Europe ex UK 1900–2020

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The 2020 Europe ex UK edition of our annual report on the history of financial markets provides context for the range of returns investors can expect from equities, bonds, and cash; reveals the importance of various components of equity returns; examines the evidence for equity mean reversion; and reviews the relationship between initial valuations and subsequent returns for equities and bonds. It also analyzes the historic economic declines and sharp asset price movements that resulted from the COVID-19 pandemic in 2020.

Decades of Data: United Kingdom 1900–2020

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The 2020 UK edition of our annual report on the history of financial markets provides context for the range of returns investors can expect from equities, bonds, and cash; reveals the importance of various components of equity returns; examines the evidence for equity mean reversion; and reviews the relationship between initial valuations and subsequent returns for equities and bonds. It also analyzes the historic economic declines and sharp asset price movements that resulted from the COVID-19 pandemic in 2020.

Brexit Update

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The historic milestone reached when the white smoke emerged from Brussels and London on 24 December 2020 represents the end of the beginning in the establishment of the new relationship between the UK and EU, rather than an end in itself. Nonetheless, with the lingering threat of a tumultuous no-deal exit now removed, the headwind that this represented to the performance of UK assets has now subsided.

Decades of Data: 1900–2019

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As the current market environment continues to rapidly evolve, we remind investors that reviewing the history of business cycles, returns, and valuations can help provide a framework for understanding the market today. Our 2019 edition of Decades of Data presents historical analysis on economic indicators, equity, fixed income, and cash markets across eight geographies over the very long term.

Friend or Foe: Hedge Funds Versus Alternative Risk Premia (Euro Edition)

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It has been a challenging time for hedge funds in recent years. Loose monetary policy has driven equity markets upwards and hurt short books. The growth of quantitatively traded funds has eroded some of the inefficiencies commonly exploited by hedge funds. This fact, coupled with the shift toward low-fee passive and alternative risk premia (ARP) products, has raised questions about the merits of hedge funds in investor portfolios. In this paper, we focus on comparing ARP versus hedge funds and investigate whether hedge funds and ARP funds are complementary or whether ARP funds are actually a viable replacement for hedge funds.

Will Weak Economic Data in the Euro Area Undercut Its Equities?

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No, we don’t think so. While euro area economic activity has weakened meaningfully, with real GDP growth falling to its lowest annual pace (1.1%) since 2013 in third quarter, strong equity returns aren’t dependent on robust economic growth. Ultimately, we continue to like the bloc as part of a risk-controlled overweight to global ex US equities funded from US equities.