Are managers holding unrealistic growth expectations?

Expectations for long-term growth are "unrealistically biased" towards the US, despite the stimulus bazookas unleashed in other regions, argues Brian Jacobsen from Wells Fargo Asset Management.

European equities had a rough 2014. As a whole, Europe returned under 5.22% (in local currency terms) compared with the 13.36% return from the MSCI USA index. Europe really did look like the sick man of the markets. The region was even worse when translated into pounds or euros. In pounds, the MSCI USA index returned 20.42%, while in euros, it returned 29.09%. Economies and markets can move in different directions. Markets move based on shifting expectations, and whether reality deviates from what was expected. Investors have low expectations for Europe in terms of economic growth, an...