“I think equities are really the place to be right now. There is a lot of momentum, a lot of investors who have been on the side-lines are actually joining,” says Hasager, arguing it’s therefore a sort of self-fulfilling prophecy that markets will go up in the near future.
“If you look at the fundamentals, equities are not that expensive. They have been cheaper of course but valuation-wise it’s still a good place to be. Even US equities have been much more expensive in the past,” he says.
“We are not even at 20 yet in [forward] P/E so there’s still plenty of room [for multiple expansion]. I agree with you there could be an issue long-term. But I don’t see any major negatives coming in the near future.”
Formuepleje has a maximum overweight to equities now. “Within that, we are slightly overweight Europe, and US small and midcap.”
“We can definitely speak oft a bond bubble,” says Hasager. “It has to correct at some point. Maybe it’s happening in the US this year, and investors would be happy to see that happen. It will take a bit longer for Europe, but in three to five years rates will normalise.
“This level could be lower than we have been used to, but rates near zero are just not sustainable.”