Long Run Returns Monitor (Jul. 2021)

While emerging market equities have generally struggled since the previous edition of our Long Run Returns Monitor was published, most other asset classes have fared reasonably well. Most notably, government bond yields have fallen across the board, developed market real estate investment trusts (REITs) have made strong gains, and equities at the global level have also risen, buoyed by the strength of the US stock market. The key upshot is that the new higher starting points for many asset classes mean that our projected returns from them over the next decade or so are generally a bit less positive than they were roughly a month ago. We continue to forecast that the returns from bonds will be meagre, those from equities and REITs reasonable rather than stellar, and those from commodities poor.