Equity markets will finally see positive fund flows

ON EUROPE

Aviva Investors' John Botham explains how European equities will benefit from the broadening global recovery.

European equities are likely to benefit from the broadening of the global recovery. As rising inflation reduces the attractions of bonds and cash, equity markets should profit from positive fund flows for the first time in years. With austere fiscal policy the main tool available for deficit reduction, economic growth in the eurozone is likely to remain sub-trend for some time. That will mask huge contrasts with states that manufacture and export doing better than those that consume and must repay debt. It is a continent of contrasts, meaning expectations and valuations are lower for ...