Allianz's CIO Macdonald: As rates normalise so should volatility

Global equity markets are closing in on the tenth anniversary of the global financial crisis.

Since the trough in February 2009, global equities have delivered robust annual double-digit returns with very low volatility.  Equity investors who held the faith during those fragile times have been well rewarded. However, as the drivers of these strong returns wane this year and next, flatter returns and rising volatility are likely. The drivers of the strong equity returns have been robust liquidity, strong earnings growth and revaluation. Liquidity has been supported by exceptionally low interest rates and quantitative easing. We are already some way through the gradual normal...