jpm_asset_mgmt
  • Insights

    Liquidity Insights

    • Liquidity Insights Overview
    • Audio Commentaries
    • Case Studies
    • Leveraging the Power of Cash Segmentation
    • Cash Investment Policy Statement
    • China Money Market Resource Centre
    • PeerView Survey

    Market Insights

    • Market Insights Overview
    • Eye on the Market
    • Guide to the Markets
    • Market Updates

    Portfolio Insights

    • Portfolio Insights Overview
    • Currency
    • Fixed Income
    • Long-Term Capital Market Assumptions
    • Sustainable Investing
  • Resources
    • MORGAN MONEY
    • Account Management & Trading
    • Multimedia
    • Announcements
  • About us
  • Contact us
Skip to main content
  • English
  • Role
  • Country
  • MORGAN MONEY LOGIN
Search
Menu
CLOSE
Search
You are about to leave the site Close
J.P. Morgan Asset Management’s website and/or mobile terms, privacy and security policies don't apply to the site or app you're about to visit. Please review its terms, privacy and security policies to see how they apply to you. J.P. Morgan Asset Management isn’t responsible for (and doesn't provide) any products, services or content at this third-party site or app, except for products and services that explicitly carry the J.P. Morgan Asset Management name.
CONTINUE Go Back
  1. Home
  2. Insights
  3. Portfolio Insights Overview
  4. Long-Term Capital Market Assumptions
  5. Equity assumptions

  • Share
  • LinkedIn Twitter Facebook
  • Email
  • Download
  • Print
  • Actions
  • LinkedIn Twitter Facebook
    Email Download Print

Equity assumptions

09/11/2020

Christopher Sediqzad

Patrik Schöwitz

Tim Lintern

Sylvia Sheng

Emily Overton

Mallika Saran

Stephen Macklow-Smith

Tougher starting point, lower returns

IN BRIEF

  • We raise our long-term (10– to 15-year) equity return assumptions across most regions, with developed markets and emerging markets both up. The expected dispersion in returns between emerging and developed equities is roughly unchanged in local currency terms at 3.00%, while marginally expanding in U.S. dollar terms, from 2.75% to 2.90%.

  • In the U.S., our expected return increases to 5.60% from 5.25%, primarily due to the reduction in the drag from valuation normalization; in the euro area, our equity return estimates are slightly lower due to a modest cut to euro area GDP expectations. We upgrade our expected UK equity returns, with attractive valuations offsetting lower margins and a stronger pound sterling vs. the U.S. dollar.

  • Japanese equities posted the largest upgrade among developed markets, increasing from 5.00% to 5.50% in local terms. We continue to expect governance-led reforms to drive a sustainable increase in return on equity along with capital return to shareholders.

  • We project modestly higher emerging market equity returns, with a diminished drag from margin normalization offsetting the negative impact from several GDP growth downgrades.

  • We expect the USD to weaken over our forecast horizon, providing a tailwind to the attractiveness of international equity markets to U.S. dollar-based investors.

 



This year, our equity return assumptions rise across most regions

SELECTED DEVELOPED MARKET EQUITY LONG-TERM RETURN ASSUMPTIONS AND BUILDING BLOCKS

Source: J.P. Morgan Asset Management; estimates as of September 30, 2018, and September 30, 2019.

SELECTED EMERGING MARKET EQUITY LONG-TERM RETURN ASSUMPTIONS AND BUILDING BLOCKS

Source: J.P. Morgan Asset Management; estimates as of September 30, 2018, and September 30, 2019.
* China refers to MSCI China Index.

DOWNLOAD THE FULL PDF

View Other Assumptions

Examine our return projections by major asset class, their building blocks and the thinking behind the numbers.
  • Fixed income
  • Currency exchange rate
  • Macroeconomic
  • Volatility
  • Alternative assets
  • Portfolio implications

EXPLORE MORE

2021 Long-Term Capital Market Assumptions

Discover the 2021 edition of J.P. Morgan's Long-Term Capital Market Assumptions, drawing on the best thinking of our experienced investment professionals.

Read more

LTCMA Matrices

Our assumption matrices are designed to help evaluate the long-term risk and return trade-offs across and within asset classes and regions.

Access now
Equity Markets Equity Income Equities
J.P. Morgan Asset Management

  • Investment stewardship
  • About us
  • Contact us
  • Privacy policy
  • Cookie policy
  • Binding corporate rules
  • Sitemap
Decorative
J.P. Morgan

  • J.P. Morgan
  • JPMorgan Chase
  • Chase

READ IMPORTANT LEGAL INFORMATION. CLICK HERE >

The value of investments may go down as well as up and investors may not get back the full amount invested.

Copyright 2021 JPMorgan Chase & Co. All rights reserved.