Long-run asset class performance: 30-year return forecasts (2026–55)
We expect lower long-term returns across most asset classes, driven by weaker productivity growth under a higher carbon pricing assumption this year. Equities are still expected to outperform bonds over the next 30 years, although the margin of outperformance has narrowed.
Profily autorov
Over the next 30 years, equities are still forecast to outperform other asset classes, even after accounting for climate change. Emerging market (EM) equities should lead developed markets, while credit and property are expected to deliver stronger returns than sovereign bonds. While the risk premium between global equity and sovereign bond returns has narrowed to 2.6% this year, driven by lower equity return forecasts, investors remain incentivised to move up the risk curve. Active management will be critical, given the challenges of generating returns in a climate-aware investment landscape.
- Read our latest 30-year return forecasts
This year, we expect lower returns across most asset classes in both real and nominal terms, particularly in equities. Globally, our equity return forecast has edged down to 6.6% from 6.8%, mainly due to weaker expected returns in EM. In countries such as China and India, forecasts have declined because of downgrades to expected earnings growth, and dividend yields were cut following strong market performance this year. By contrast, US equity returns have improved, supported by the inclusion of buybacks and stronger earnings growth.
For our cash return forecasts, particularly in developed economies, the expected decline is mainly due to weaker productivity growth, driven by a higher carbon pricing assumption this year. These downgrades to cash return forecasts translate into lower long-term return expectations for sovereign and credit bond markets.
Our analysis relies on assumptions, as there is limited consensus on the economic impact of climate change or the costs and nature of the transition. We have partnered again with Oxford Economics to apply their climate-macro model to our macro assumptions for estimating returns. Forecasts vary by model and assumptions, but the overall direction is clear. Our estimates provide a consistent framework for evaluating a development that will significantly shape the global economy and financial system.
Our central scenario remains the Delayed Transition – a disorderly path to net zero, with carbon pricing rising only after 2030. This scenario results in higher inflation across all countries, while the impact on productivity is uneven.
Profily autorov
Témy