Asset Allocation

Q1 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.​​​​​​​​

  • Order By
​​

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

Observations
  • The United Kingdom, as well as much of continental Europe, has attractive valuations
  • Even after a remarkable 2014, India looks undervalued from a Shiller P/E perspective
Learn More

View real yields across countries and spreads

Observations
  • Two trends in Europe are expected to persist: a flattening yield curve and low rates
  • Over the coming decade, currently low yields in Canada are expected to move back to average
Learn More

Compare real commodity returns over time

Observations
  • A term structure in steep contango provides headwinds for sugar futures
  • In real terms, the future looks bleak for gold; however, rapidly increasing inflation could provide a spark
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

Yesterday’s Gone: Year-End Capital Markets Commentary and ExpectationsWith updated return expectations, we estimate that the performance of U.S. stocks and bonds over the next 10 years will be significantly lower than long-term historical averages. Other asset classes may produce moderately better returns.
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's Up? Quantitative Easing and InflationThe U.S. Federal Reserve, the Bank of England, the European Central Bank, and the Bank of Japan have variously completed, announced, or expanded their QE programs. It’s time to sort out the probable effects on inflation.