Long Run Returns Monitor (Mar. 2021)

In this first edition of the Long Run Returns Monitor we present an updated version of the projected returns from the major asset classes which feature in our annual Long Run Asset Allocation Outlook. While rising bond yields have put pressure on the prices of “risky” and “safe” assets alike in the weeks since the publication of that document, the moves in most markets have not been all that dramatic in the grand scheme of things. As a result, our view that the returns from most “risky” assets will be good rather than stellar – but still comfortably beat those from “safe” ones – over the next decade or so is little changed. Two asset classes which have bucked the trend by performing quite well in recent weeks are energy commodities and industrial metals. The further run-up in their prices means that our already pessimistic projections for returns from them over the next ten years are now even more downbeat.