NEW YORK, November 8, 2022 /PRNewswire/ — JP Morgan Asset Management today released its Long-Term Capital Markets Assumptions (LTCMA) for 2023, providing a 10-15 year risk and return outlook, with asset markets offering today the best long-term returns in more than a decade, driven by lower valuations and higher yields.
At 27e edition of research, the expected annual return for a $60/40 portfolio of stocks and bonds over the next 10 to 15 years increases from 4.30% last year to 7.20%. While many investors are rightly focused on high inflation and other near-term headwinds, inflation is expected to ease over the next two years and long-term return projections have risen markedly.
“The painful fall in stock and bond markets in 2022 may not be over yet, but longer term, we see this year’s turmoil creating the most attractive investment opportunities we’ve seen in a decade. “, said John Billon, Head of Global Multi-Asset Strategy, JP Morgan Asset Management. “While markets remain challenging in the near term, for the first time in years investors have at their disposal a comprehensive portfolio toolkit with return forecasts for assets across the risk spectrum once again. positive.”
“Despite the short-term cyclical challenges, our inflation forecast is only up slightly as we see inflation cooling close to central bank targets,” said Dr. David Kelly, Chief Global Strategist, JP Morgan Asset Management. “Although entry points are more attractive than they were a year ago, they could become even more attractive if the cyclical weakness of 2022 extends into 2023, as seems likely. As a result, Investors should consider the timing of their entry point, with an eye down to the level of drawdown they can tolerate in the short term.”
“Our long-term capital markets assumptions for 2023 call for asset classes to return to their traditional roles in portfolios, with equities providing strong capital appreciation, fixed income securities providing meaningful income and alternatives offering diversified exposure to unique yield streams,” said Monica Isar, Global Head of Multi-Asset Wealth and Portfolio Management Solutions. “These assumptions are integral to our approach to creating goal-aligned portfolios that help clients achieve intended results.”
This year’s research also includes two topical articles addressing priority questions for investors:
- Will globalization resume or recede in the years to come?
- What are the investment risks and opportunities as the world’s population approaches 10 billion?
LTCMAs are developed through an extensive and proprietary research process that draws on quantitative and qualitative data as well as insights from a team of over 90 experts at JP Morgan Asset and Wealth Management. In their 27e year, these proven projections help build stronger portfolios, guide strategic asset allocations, and set reasonable risk and return expectations over a 10-15 year timeframe for over 200 major asset classes. assets and strategies. These assumptions feed into decision-making in JP Morgan’s multi-asset investment engine and inform conversations with clients throughout the year.
See the full long-term capital markets assumptions for 2023 here.
About JP Morgan Asset Management
JP Morgan Asset Management, with assets under management of $2.3 trillion (from September 30, 2022), is a global leader in investment management. JP Morgan Asset Management’s clients include institutions, retail investors and high net worth individuals in all major markets around the world. JP Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity. For more information: www.jpmorganassetmanagement.com.
JPMAM’s long-term capital market assumptions: Given the complex risk-reward trade-offs involved, we advise clients to rely on judgment as well as quantitative optimization approaches to define strategic allocations. Please note that all information presented is based on qualitative analysis. It is not advisable to rely exclusively on the foregoing. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. Note that these asset class and strategy assumptions are passive only – they do not take into account the impact of active management. References to future returns are not promises or even estimates of actual returns that a client portfolio may achieve. Assumptions, opinions and estimates are provided for information purposes only. They should not be considered recommendations to buy or sell securities. Forecasts of financial market trends based on current market conditions constitute our judgment and are subject to change without notice. We believe the information provided here to be reliable, but do not guarantee its accuracy or completeness. This document has been prepared for informational purposes only and is not intended to provide, and should not be relied upon for, accounting, legal or tax advice. Assumption results are provided for illustrative/discussion purposes only and are subject to important limitations. Estimates of “expected” or “alpha” returns are subject to uncertainty and error. For example, changes in the historical data from which it is estimated will have different implications for asset class returns. The expected returns for each asset class are conditional on an economic scenario; actual returns in the event the scenario occurs could be higher or lower than they have been in the past, so an investor should not expect to obtain returns similar to the results shown here. References to future returns of asset allocation strategies or asset classes are not promises of actual returns that a client portfolio may achieve. Due to the inherent limitations of all models, potential investors should not rely exclusively on the model when making a decision. The model cannot take into account the impact that economic, market and other factors may have on the implementation and ongoing management of an actual investment portfolio. Unlike actual portfolio results, model results do not reflect actual transactions, liquidity constraints, fees, expenses, taxes and other factors that may affect future returns. The model assumptions are passive only – they do not take into account the impact of active management. A manager’s ability to achieve similar results is subject to risk factors over which the manager may have no or limited control. The opinions contained herein should not be considered advice or a recommendation to buy or sell an investment in any jurisdiction, nor a commitment by JP Morgan Asset Management or any of its affiliates to participate in the one of the transactions mentioned in this document. All forecasts, figures, opinions or investment techniques and strategies presented are for informational purposes only, based on certain assumptions and current market conditions and are subject to change without notice. All information presented here is believed to be accurate at the time of production. This document does not contain sufficient information to support an investment decision and you should not rely on it to assess the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit and accounting implications and determine, with their own financial professional, whether any investment referred to herein is deemed appropriate for their personal objectives. Investors should ensure that they obtain all relevant information available before making any investment. It should be noted that investing involves risk, the value of investments and the income from them may fluctuate depending on market conditions and tax treaties and investors may not get back the full amount invested. Past performance and performance are not a reliable indicator of current and future results.
JP Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its subsidiaries worldwide.
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