Asset Allocation

Q3 Expected Returns


​In a world of low bond yields and slow economic growth, historically realized 5-6% real (7-8% nominal) asset class returns may be unrealistic expectations for the future. Using a structural “building blocks” approach, we forecast long-term returns, made available in the charts below.​​​​​​​​


Asset Allocation Quarterly Updates​

We bring you our perspectives on a variety of topics affecting asset allocation.
Listen to our perspectives on capital market expectations, and our views on broad market asset class considerations.


Compare Shiller P/E values across equity markets

  • Shiller P/E values in many developed markets are outside historical norms
  • Emerging markets look undervalued through a Shiller P/E lens
Learn More

View real yields across countries and spreads

  • Short-term real yields in many developed markets are negative
  • Yield curves in many markets are steeper than historical norms
Learn More

Compare real commodity returns over time

  • Expected returns in individual commodities remain varied
  • Commodity indices provide the opportunity for a premium due to disciplined rebalancing
Learn More

The Research Affiliates Approach to Capital Markets Forecasting

With the objective of providing transparency into our long-term expected returns, these documents detail the methodologies underlying our models.  

A good place to start is with the methodology overview document which provides background on the building blocks approach.  This is the common framework that serves as the foundation upon which each model is built.  Each asset class then has its own methodology document detailing specifics related to that asset class.  These are living documents which will evolve over time, and we encourage you to check back in the future for updates.

Deepen Your Understanding

Target-Date Funds: No Happily Ever After in This Fairy TaleTarget-date funds come with a winning story about risk-taking at progressive stages of life, but there is evidence the investment strategy is seriously flawed.
Our Investment BeliefsResearch Affiliates’ central philosophy holds that opportunity arises from long-horizon mean reversion. This conclusion rests on three core beliefs about investors’ preferences, asset prices, and the vital importance of conviction.
What Are We Doing to Our Young Investors?With the growing use of target date funds, young workers’ defined contribution (DC) portfolios are increasingly concentrated in stocks. But in a recession many young workers cash out their DC assets to meet living expenses. A potential solution: less risky starter portfolios.