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The 2020s: Roaring, Boring or Flooring?

Stop the ride, I want to get off! Long-Term Asset Return Forecasts for the new decade.

After a decade when 'buy almost everything' worked, with almost every class of asset roaring higher, investors meet the 2020s with an investment outlook that may prove to be more challenging. Unconventional central bank monetary policy measures (e.g. QE) provided much of the 'fuel to the fire' that helped propel asset classes significantly higher over the last decade. However, commentators think that many central banks have very little scope when it comes to additional monetary policy tricks to implement when the next recession or global slowdown arrives. Most central bankers now see fiscal policy as the potential solution should the global economy start to falter.

Long-term thematic trends are at play too, with the maturation of the Chinese economy and demographic changes over the next decade both likely to put downward pressure on global GDP rates. Technological advancement and climate risks are additional factors which may adversely affect economic growth in the coming years. In this collection of leading institutional thought leadership articles which focus on Long-Term Asset Return Forecasts, it is apparent that investors see a wide range of potential outcomes in the years ahead.

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Reconfiguring 60/40: Investing in a World of Ultra-Low Rates (JP Morgan AM, 2019)

The abbreviated version of JP Morgan AM's 2020 Long-Term Capital Market Assumptions (LTCMAs) offers insights into asset market returns over the next ten-to-fifteen years.

2020 Long-Term Capital Market Expectations (Franklin Templeton)

For compliance reasons, this paper is only accessible in certain geographies

This paper outlining capital market expectations from Franklin Templeton is designed to provide longer-term investment horizon forecasts for asset classes, typically looking at a five-to-ten year outlook period.

The next decade in asset allocation (UBS AM, Dec 2019)

UBS AM ponders whether, after a decade of exceptional risk-adjusted returns from many asset classes, investors should brace themselves for an outlook where returns across most asset classes are likely to be lower. They contend that active manager skill may play a more significant role in portfolio returns than it has done in the last decade.

New Year. New Decade. Outlook 2020 (AGF Investments)

For compliance reasons, this paper is only accessible in the United States and Canada

AGF's Investment Management team outlines the significant events, stories and themes that are likely to impact the market in 2020 and beyond.

Asset Class Return Forecasts Q4 2019 (Amundi AM)

For compliance reasons, this paper is NOT accessible in the United States

Amundi AM offers its Asset Class Return Forecasts for a three-to-ten year investment time horizon. These forecasts are predicated on a baseline scenario of a late-cycle slowdown supported by easy central bank monetary policy.

The next phase of China's growth (JP Morgan AM, Dec 2019)

JP Morgan AM's paper focuses on China as a critical focal point for investors over the next 15 years due to its increasing influence on global economic growth. As the economy transitions from middle income to high income, growth is expected to moderate from that experienced over the last two decades.

Q4 2019 Capital Market Assumptions (QMA)

This Capital Market Assumptions (CMA) paper from QMA provides a snapshot of the long-term (10 years) return expectations for all the major asset classes.

The 21st Century Portfolio*: Investing for the grandchildren (Invesco, Dec 2019)

For compliance reasons, this paper is only accessible in certain geographies

Invesco offers its suggestions as to what themes may dominate over the rest of the century and concludes that demographics, technological change, climate change and low bond yields are those most likely to exert lasting influence.

Prospects for Global Potential Growth: The Next Decade (PGIM Fixed Income)

PGIM Fixed Income investigates historical global GDP growth and caveats that a global demographic slowdown and the transition of China into a more mature economy are things that investors need to take heed of in the next decade.

10-Year Strategic Outlook for Major Asset Classes (Rockefeller Global Family Office, 2019)

In this insightful paper, Rockefeller Global Family Office outlines its 10-year outlook forecasts for 40 different asset classes, including both traditional and alternative assets.

10-year return forecasts, 2019–29 (Schroders)

Schroders' latest 10-year return forecasts finds Emerging Markets (EM) bonds and equities offering higher potential returns than most Developed Markets (DM) assets, though return forecasts for both DM and EM assets have been downgraded.

5-year returns forecast for major asset classes (Columbia Threadneedle, Dec 2019)

Columbia Threadneedle has recently published its Long-Term Strategic Outlook, in which most asset returns have been downgraded.