Slower-burn surprises a route to durable returns

ON EUROPE

Gartmore's John Bennett says you should expect the unexpected to make the most of equities over the coming decade

It is often said success in our business is about being on the right side of surprise. Two surprises strike us as likely in the coming years. First, we sense investors are in the wrong asset classes for the decade ahead. Having been enamoured by private equity and other alternatives, institutional investors now appear dazzled by another phenomenon: the scramble for yield. What else can explain the hunger for paper issued by highly indebted, currency-debasing sovereigns at long-term yields of barely 2.5%? Buyers of such paper doubtless have the compelling logic of “fixed liabilities” t...