Long Run Returns Monitor (Apr. 2021)

Following their sharp rises earlier on in the year, government bond yields have steadied over the past few weeks. Perhaps reflecting this, both global equities and developed market (DM) REITs have generally rallied sharply since the previous edition of the Long Run Returns Monitor was published in early March. Given that our forecasts for where most equity and REIT indices will end 2030 are little changed, their further recent climb means that our projections for returns from these asset classes between now and then have become a bit less positive. However, the big picture is that, in most cases, our projections have not changed a great deal from those detailed in our Long Run Asset Allocation Outlook. We think that that the returns from most “risky” assets will fall short of those seen over the past decade, but will still beat those from “safe” ones by a wide margin. The exception to this is industrial commodities, for which we forecast that returns will be quite poor.