Long-Term Return Forecasts: Q2 2021 Update

Capital Market Assumptions and Projections for Global Assets

Several long-term asset class forecasts have recently begun to include elements of climate change risk. The intersection of these two concepts is covered within QMA's capital market assumptions paper, which includes both an optimistic and a pessimistic climate scenario. DWS's webinar about their long-term forecasts for global asset classes weaves in many aspects of environmental, social, and governance investing.

A high degree of dispersion is also present within the forecasts for different asset classes, as evidenced by PineBridge's latest Capital Market Line analysis. The picture that GMO paints is particularly dire, with only emerging value returns projected to be positive in the medium term.

CML: Policy swings and a new inflation regime (PineBridge Investments, Apr 2021)

PineBridge reviews global economic conditions and monetary stimulus efforts before presenting insights from their latest Capital Market Line analysis. This quarter's CML presents a high degree of dispersion between asset class projections, but favours EM debt and equity.

Capital Markets View: April 2021 – Global edition (MFS IM, 2021)

This MFS quarterly outlook compares current equity market attributes and bond yields to longer-term (ten-year) averages for each market.

Asset Classes Views: Climbing the hill (Amundi, 2021)

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

Within this 84-page guide, Amundi Asset Management showcases their three, five, and ten-year expected return forecasts for major asset classes, as well as the key drivers affecting these assumptions.

Webinar: 10-Year return expectations for the green decade (DWS, 2021)

This webinar from DWS discusses their ten-year forecasts for major asset classes. It also compares returns from ESG investments versus traditional investments.

Top-Down Portfolio Implications of Climate Change: Research brief (QMA, 2021)

Climate change is a long-term issue, and as a result, QMA makes the case that climate-related projections should become part of investors' long-term asset class assumptions.

Ten Years Out: 2021 Capital Market Assumptions (Rockefeller Capital Management)

The Rockefeller Family Office showcases its methodology for generating capital markets assumptions, which focuses on decomposing the relevant fundamental risk factors.

Long-Term Asset Class Forecast (AIMCo, 2021)

AIMCo presents their long-term (ten-year) forecast for 18 different asset classes. Their models attempt to capture a post-pandemic perspective, and now also incorporate climate change analysis.

Long-Term Strategic Outlook (Columbia Threadneedle Investments, 2021)

Columbia Threadneedle depicts their five-year forecast for major asset classes via a single graph that is accompanied by a brief overview of key takeaways.

7-Year Asset Class Forecast: Q1 2021 (GMO)

GMO's seven-year forecast presents a fairly dire picture for global asset classes. Only emerging value is projected to produce a positive real return over this time-period.