What impact will Europes money printing program have on U.S. investors in the region?
Japans recent experience may serve as a roadmap. The Bank of Japan unleashed a massive money printing program in 2013 that sent the countrys stock market soaring 47%. The Yen depreciated 21%, however, leaving investors with a 26% return in U.S. dollar terms.
Although we do not expect this magnitude of gains in Europe, a similar narrative may unfold. We expect European stocks to rise in 2015. U.S. investors in the region should enjoy healthy returns, in our view, although not as high as local currency investors.