Europe and Japan show ‘promise’, says Wöhrmann

Mr Wöhrmann, chief investment officer at DWS, tipped German and Japanese stocks because the regions’ low valuations “suggest promise” for the countries.

He added the current dividend yield of 3.5 per cent for stocks in Europe’s top economy, coupled with a falling euro, should also have a “supportive effect”.

“History shows that stocks have been an excellent means for navigating around the stealth transfer of assets in times of financial repression, with returns performing significantly above the average inflation rate,” Mr Wöhrmann said.

The executive pointed out a similar situation was occurring in export-driven Japan.

“While the sharp devaluation of the yen puts the focus onto the Nikkei and Topix [stockmarket indices], we believe that investors should employ currency hedging, as potential gains are sustained almost completely by the possibility of further devaluation,” he said.

Mr Wöhrmann said the firm has been “overweight in corporate bonds for months”.