In the context of "if equity returns follow forward", what exactly does "follow forwards" mean?
in this context it probably means that over time equity spot will move towards the forward.
For example: at t0 the spot S(t0) = 100, and assume divs are 0 and rate is 1%. Then the 1y forward would be 100*exp(0.01*1).
If spot would follow the forward, then after 6months the spot would have to be 100*exp(0.01*0.5).