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Long-Term Return Forecasts: Autumn 2021 Update

  • ,  Chief Executive |
  • 11 Oct 2021
  • Updated 12 Oct 2021

Capital Market Assumptions and Projections for Global Asset Markets

Climate Change risk continues to be incorporated into long term asset return forecasts, with Robeco among the latest to include it as a medium-term risk likely to impact returns. Commentators appear to be concluding that this may be a short cycle, with monetary and fiscal policy likely to turn tighter in 2022, particularly if inflation continues to remain uncomfortably high for many central bankers. Most commentators seem willing to continue with the risk asset play though expectations of returns are being dialled back after strong performance.

Economies are likely to revert to trend growth in the medium term, though supply chain issues may persist until mid-2022 on some forecasts. Inflation has been running 'hot' due in part to imbalances in supply and demand caused by bottlenecks in the supply chain. With this in mind, Columbia Threadneedle will be addressing how retailers and consumer stocks may fare over the Christmas Period in their upcoming webinar here on Savvy Investor on October 21st 2021.


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RECENT LTRF and CMA Forecasts

5-Year Expected Returns 2022-2026: The Roasting Twenties (Robeco, 2021)

For the first time, Robeco incorporates climate change into their latest five-year outlook piece as a medium-term risk impacting return forecasts. How much of an effect climate change policies may have on asset prices is one of the key questions facing investors.

Global Investment Outlook – Fall 2021 (RBC GAM)

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

RBC GAM‘s autumn outlook piece sees them still overweight equities, but preferring to trim fixed income positions in favour of a higher cash allocation.

Five Year Outlook and CMAs: 2022 Edition (Northern Trust AM, Sep 2021)

Northern Trust AM highlights six important themes that they believe investors should consider and which underpin the basis of their five-year return forecasts.

2021 Long-Term Capital Market Assumptions: Q3 update (Invesco, 2021)

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

Invesco’s updated Long-Term Capital Market Assumptions sees similar themes persisting in the investment landscape but cautions that the next ten years are likely to be rather different from the last, as a low yield, low growth world now faces rising inflation and duration risks. This paper is available in a range of global currency editions.

Three Dimensions of Portfolio Resilience (WisdomTree Investments, Sep 2021)

For compliance reasons, this paper is only accessible in the UK & Europe

WisdomTree Investments’ equity outlook paper focuses on the themes investors should consider for adding resilience to their portfolios, given the rally that equity markets have had, and with the likelihood of less accommodative monetary conditions fast approaching.

Q4 2021 Outlook (PGIM Quantitative Solutions)

PGIM Quantitative Solutions stick with their pro-risk strategy, remaining overweight equities, real estate and commodities, relative to cash and fixed income. Value, cyclical, and small caps appear attractively valued provided Delta variant risks recede and economic growth remains strong.

Post-Summer Check-up on the Regime Shift (Amundi, 2021)

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

In this paper from Amundi, they check on some new elements to the narratives that investors are having to contend with, and how investors might adapt equity portfolios to contend with persistently higher inflation and the tighter monetary policy that is likely to be implemented to counter it.

Global Real Estate Outlook: Edition 3 (UBS AM, Sep 2021)

UBS AM highlights the strong performance by real estate during H1, particularly in the industrial sector. They suggest an element of mean reversion may occur after such a strong run, and suggest investors consider reducing industrial exposure and rebalancing into multifamily, offices or even some parts of the retail sector.

Global Economic Outlook (Fitch Ratings, Sep 2021)

In Fitch’s economic outlook paper, they anticipate that the inflation shock may influence some decision makers and consequently, fiscal and monetary policy may be less supportive of growth in 2022.

Market Views – 04 Oct 2021 (Blackstone)

Blackstone Group’s Joe Zidle offers the latest in a series of occasional market views and insights.


Webinar: 21 Oct 2021: Supply Chain Scrooge? (Columbia Threadneedle)

Join Columbia Threadneedle on Thursday 21st October at 9 am EDT / 2 pm BST / 3 pm CEST to get an expert’s view on how retailers and consumer stocks are expected to fare this Christmas holiday season, given the logistical challenges.