Taunus Trust analyzes sector-adjusted valuations across forty equity markets to estimate long-term real return prospects. Valuations are highly heterogeneous, with twenty-two markets screening attractive on both CAPE and price to book, yet cap weighting leaves only thirteen percent of global market value in the attractive bucket. U.S. valuations sit near historic extremes, while Latin America and Emerging Asia screen most attractive, and Germany remains compelling even after sector adjustment.
Sector-Adjusted Global Stock Market Valuation and Long-Term Outlook
Taunus Trust
Norbert Keimling
Research
7 Pages
Key Takeaways
Uneven valuations: Twenty two of forty markets look attractive by CAPE and P B, while eleven look expensive.
Cap weight effect: Only thirteen percent of global market cap screens attractive due to heavy U.S. valuation.
US return risk: Sector adjusted CAPE near thirty two and P B 4.7 imply about 0.8 percent real returns over fifteen years.
Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week
