UBS Asset Management Investment Solutions
Our five-year (2019-2024) expectations in brief
UBS Asset Management’s Investment Solutions team conducts ongoing macroeconomic research to develop our baseline five- and 10-year return expectations. Drawing on the breadth and depth of expertise provided by more than 100 professionals and an over-36-year asset management track record, our capital market expectations quantify risk/return expectations for a broad set of asset classes, incorporate current market and economic conditions and provide a key component for modeling a portfolio’s strategic asset allocation.
- As global growth slows, our five-year return expectations are adjusted downward for most developed-market assets, while our expectations are increased for some emerging markets
- Over the next five years, we expect average annual global growth of 2.8% and average global inflation of 2.3%
- Real growth on average should be slightly lower than in the previous decade
- US equities are overvalued and we expect mid-single digit returns
- Most non-US markets are fairly valued or undervalued. We expect high single digit returns
- With negative nominal yields still predominant in many developed markets, we expect very low fixed income returns. For many markets, investors should prepare for negative nominal returns
- For the next few years, we have lower expectations for unlevered real estate
- For US private equity we expect returns in the high single digits, but not on par with some of the touted returns of the past. We expect unhedged global private equity to outperform the US
Special topic: Chinese financial markets
- As China continues its rapid transition from an emerging to a developed market, we believe that Chinese equities and fixed income will continue to offer investors unique opportunities
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