We anticipate that returns across major asset classes will converge over the next five years. As a long-term investor, this presents you with an opportunity to reassess and refine your strategic asset allocation. Our experts share detailed forecasts and actionable recommendations.

Overview: The Great Convergence

Returns across developed market equities and bonds are converging. This shift marks the end of US exceptionalism and highlights the need for a new approach to portfolio construction.

Key insights:

• The convergence of returns across asset classes signals a more challenging environment for traditional equity-bond portfolios, with nominal returns expected to be modest.

• Emerging markets and European stocks are positioned to outperform thanks to a combination of growth-boosting structural reforms and public investment.

• Investors will need to rethink traditional regional allocations and focus on structural growth to capture alpha in a low-return world.