When the Economic Police round up the culprits behind America's end-of-the-century bull market, expect to see all of the usual suspects: growth, low inflation and technology-induced productivity. Don't be surprised, however, if the coppers roust a few eyebrow-raising accomplices. Lurking in our economic alleyways, small-time hoods like nutrition, medicine and longevity have all helped cause our incredible good fortune, scaring us off the dimly lit streets of
and onto the boulevards of individual retirement accounts and 401(k) personal pension plans. As we live longer, we have put more money into stocks and bonds, facilitating a virtuous circle of rising asset prices.
Similar demographic dynamics are transforming Europe. In just 40 years, the number of workers supporting each pensioner is seen halving, to two. European governments are encouraging their citizens to invest for their retirements, while the introduction of a pan-Continental currency eliminates at least one of the barriers to buying stocks and bonds in a neighboring country. The growth of the Internet, too, is helping to expand the European investment consciousness, giving birth to online trading, research and stock chat sites.
Don't expect Europe's equity culture to be a mere mirror of the American experience, however. History, tradition and cultural preferences will all affect its development. The likely result is a market that is both substantially similar and subtly different from America's.
This five-story package examines the transformation of Europe's markets. Today,
offers an overview of the changes and how they are creating a vibrant mutual funds industry, and
profiles one of Europe's most successful fund managers. Tomorrow,
looks at Germany's
for technology shares,
look at the growth of online trading in Europe, and Eavis
examines the macroeconomic and political barriers to the equity culture.