What drives equities when interest rates are low

The world has lived with low interest rates for more than eight years but such periods are not new. The US and UK coped with interest rates below 1% for most of the two decades spanning World War II, while Japan has lived with sub-1% interest rates since 1995. Equity markets performed differently in each case. They did exceptionally well in the US but were more lacklustre in the UK and barely eked positive returns in Japan. Although performance was different, a Schroders papers shows that the lessons learnt from these three situations are remarkably similar. (VIEW LINK)