An overview of returns in Europe

Abstract

This paper is an attempt to present a digest of European security returns. In this respect, Table 7 summarizes key data over recent years. The table presents information for the period 1967 to 1990. By and large, within Europe, equity returns appear to be very similar. To the extent that if differences exist, they can probably be attributed to too short a period for utterly unambiguous data on returns to be achieved. But there may be another explanation which relates to an international capital asset pricing model and the sinews of this topic are explored towards the end of the paper. Data are presented which compare and contrast the part played by equity markets in the structure of corporate financing in Europe. These show the contrasting cult of the equity share, with its high emphasis in Britain and much lower role in Germany and France, for example. Other statistics reveal differing share ownership structures and pension fund portfolio distributions in European countries. That the topic of realized European security returns requires further research is obviously the case. It is hoped that this paper — and others in this issue — will stimulate a desire to undertake the necessary investigations.