European equities set to surge

THERE has been significant coverage recently suggesting that asset valuations, including equities, have entered irrational territory. We acknowledge that equities have performed well over recent years but would argue that European equities could rise further.

In fact, we believe investors could see a 30 per cent market appreciation from current levels on a three-year view.

There are two key drivers to this return profile - interest rates and profit margins - and our conviction has increased over recent months. The 7 per cent market retreat since this year's peak in May offers an entry point, in our view.