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FIXED INCOME | EQUITIES | REAL ASSETS | ALTERNATIVES | |||||||||||||||||||||||||||||||||||||||||||||
TEN-YEAR CMA FORECAST | UNITED STATES | EUROPE | JAPAN | UK | CANADA | AUSTRALIA | GLOBAL | DEVELOPED MARKETS | EMERGING MARKETS | GLOBAL | ||||||||||||||||||||||||||||||||||||||
ASSET CLASS | Benchmark |
Geometric Return | Arithmetic Return | Risk | Cash | |||||||||||||||||||||||||||||||||||||||||||
FIXED INCOME | UNITED STATES | Cash | FTSE Treasury Bill 3 Mon | 2.9 | 2.9 | 0.4 | 1.00 | Inflation Linked |
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Inflation Linked | Bloomberg Gbl Infl Linked US TIPS | 4.4 | 4.6 | 6.0 | 0.02 | 1.00 | Investment Grade |
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Investment Grade | Bloomberg US Agg Bond | 4.7 | 4.8 | 4.0 | 0.08 | 0.79 | 1.00 | High Yield | ||||||||||||||||||||||||||||||||||||||||
High Yield | Bloomberg US Corporate High Yield | 6.7 | 7.1 | 9.1 | -0.07 | 0.42 | 0.33 | 1.00 | Municipal | |||||||||||||||||||||||||||||||||||||||
Municipal | Bloomberg Municipal 1-10Y Blend 1-12Y | 3.3 | 3.4 | 3.2 | 0.05 | 0.63 | 0.78 | 0.34 | 1.00 | Cash | ||||||||||||||||||||||||||||||||||||||
EUROPE | Cash | JPM GBI Germany 3 Mon | 1.5 | 2.0 | 9.5 | 0.12 | 0.37 | 0.29 | 0.39 | 0.19 | 1.00 | Inflation Linked |
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Inflation Linked | Bloomberg Euro Govt Infl Lkd | 2.0 | 2.7 | 11.9 | 0.06 | 0.58 | 0.48 | 0.52 | 0.36 | 0.88 | 1.00 | Investment Grade |
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Investment Grade | Bloomberg Euro Agg Bond | 3.4 | 3.9 | 10.5 | 0.07 | 0.54 | 0.54 | 0.46 | 0.40 | 0.92 | 0.96 | 1.00 | Cash | |||||||||||||||||||||||||||||||||||
JAPAN | Cash | JPM GBI Japan 3 Mon | 0.3 | 0.7 | 9.3 | 0.08 | 0.40 | 0.50 | 0.02 | 0.45 | 0.28 | 0.29 | 0.36 | 1.00 | Inflation Linked |
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Inflation Linked | Bloomberg JPN Govt Infl Lkd | 0.0 | 0.5 | 9.9 | 0.03 | 0.56 | 0.57 | 0.22 | 0.49 | 0.37 | 0.42 | 0.45 | 0.91 | 1.00 | Investment Grade |
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Investment Grade | Bloomberg Japanese Aggregate | 0.2 | 0.7 | 10.0 | 0.07 | 0.45 | 0.55 | 0.03 | 0.48 | 0.28 | 0.31 | 0.38 | 0.98 | 0.91 | 1.00 | Cash | ||||||||||||||||||||||||||||||||
UK | Cash | JPM GBI UK 3 Mon | 2.6 | 3.0 | 8.9 | 0.10 | 0.28 | 0.14 | 0.46 | 0.09 | 0.64 | 0.59 | 0.60 | 0.10 | 0.17 | 0.08 | 1.00 | Inflation Linked |
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Inflation Linked | Bloomberg Gbl Infl Linked UK | 4.0 | 4.8 | 12.5 | 0.03 | 0.65 | 0.58 | 0.54 | 0.43 | 0.51 | 0.65 | 0.65 | 0.27 | 0.39 | 0.30 | 0.63 | 1.00 | Investment Grade |
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Investment Grade | Bloomberg Sterling Agg | 4.9 | 5.5 | 10.7 | 0.04 | 0.58 | 0.55 | 0.49 | 0.39 | 0.56 | 0.67 | 0.69 | 0.26 | 0.33 | 0.28 | 0.80 | 0.87 | 1.00 | Cash | |||||||||||||||||||||||||||||
CANADA | Cash | FTSE TMX Canada 91 Day TBill | 2.4 | 2.8 | 9.0 | 0.09 | 0.30 | 0.16 | 0.59 | 0.12 | 0.57 | 0.58 | 0.53 | 0.08 | 0.19 | 0.06 | 0.55 | 0.40 | 0.45 | 1.00 | Inflation Linked |
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Inflation Linked | FTSE TMX Canada Real Return Bond | 3.5 | 4.3 | 12.6 | 0.02 | 0.67 | 0.50 | 0.67 | 0.38 | 0.52 | 0.66 | 0.61 | 0.22 | 0.39 | 0.24 | 0.46 | 0.62 | 0.59 | 0.76 | 1.00 | Investment Grade |
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Investment Grade | FTSE TMX Canada Universe Bond | 4.2 | 4.7 | 9.7 | 0.07 | 0.56 | 0.50 | 0.67 | 0.39 | 0.58 | 0.68 | 0.66 | 0.24 | 0.36 | 0.25 | 0.52 | 0.58 | 0.61 | 0.90 | 0.89 | 1.00 | High Yield | ||||||||||||||||||||||||||
High Yield | ICE BofAML CA HY CA Issuers | 6.0 | 6.7 | 12.2 | 0.01 | 0.34 | 0.25 | 0.66 | 0.15 | 0.56 | 0.61 | 0.58 | 0.08 | 0.19 | 0.07 | 0.55 | 0.48 | 0.53 | 0.88 | 0.76 | 0.87 | 1.00 | Cash | |||||||||||||||||||||||||
AUSTRALIA | Cash | JPM GBI Australia 3 Mon | 3.0 | 3.8 | 12.5 | 0.03 | 0.44 | 0.30 | 0.59 | 0.18 | 0.71 | 0.70 | 0.68 | 0.17 | 0.30 | 0.16 | 0.59 | 0.51 | 0.55 | 0.74 | 0.73 | 0.75 | 0.75 | 1.00 | Investment Grade |
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Investment Grade | Bloomberg Global Australia | 4.2 | 4.9 | 12.1 | 0.04 | 0.62 | 0.53 | 0.59 | 0.39 | 0.70 | 0.76 | 0.76 | 0.33 | 0.45 | 0.34 | 0.54 | 0.63 | 0.65 | 0.68 | 0.78 | 0.80 | 0.71 | 0.94 | 1.00 | Inflation Linked |
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GLOBAL | Inflation Linked | Bloomberg Global Inflation Linked | 3.6 | 3.9 | 8.3 | 0.04 | 0.83 | 0.70 | 0.58 | 0.54 | 0.69 | 0.86 | 0.84 | 0.39 | 0.54 | 0.42 | 0.58 | 0.90 | 0.82 | 0.51 | 0.76 | 0.72 | 0.57 | 0.65 | 0.78 | 1.00 | Aggregate | |||||||||||||||||||||
Aggregate | Bloomberg Global Aggregate | 3.7 | 3.9 | 6.0 | 0.09 | 0.73 | 0.80 | 0.43 | 0.62 | 0.74 | 0.83 | 0.89 | 0.66 | 0.72 | 0.69 | 0.48 | 0.71 | 0.73 | 0.45 | 0.65 | 0.68 | 0.51 | 0.61 | 0.77 | 0.88 | 1.00 | High Yield |
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High Yield | Bloomberg Global High Yield | 7.2 | 7.7 | 10.0 | -0.05 | 0.47 | 0.37 | 0.97 | 0.37 | 0.54 | 0.65 | 0.60 | 0.07 | 0.27 | 0.08 | 0.54 | 0.59 | 0.56 | 0.66 | 0.72 | 0.73 | 0.73 | 0.69 | 0.68 | 0.67 | 0.54 | 1.00 | United States |
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EQUITIES | DEVELOPED MARKETS | United States | MSCI USA IMI | 6.3 | 7.5 | 15.3 | -0.06 | 0.25 | 0.15 | 0.74 | 0.13 | 0.39 | 0.48 | 0.43 | -0.11 | 0.04 | -0.11 | 0.45 | 0.43 | 0.46 | 0.59 | 0.59 | 0.62 | 0.65 | 0.60 | 0.57 | 0.47 | 0.33 | 0.74 | 1.00 | Europe | |||||||||||||||||
Europe | MSCI Europe ex UK IMI | 6.0 | 7.9 | 19.6 | 0.04 | 0.26 | 0.19 | 0.73 | 0.16 | 0.62 | 0.66 | 0.62 | -0.03 | 0.12 | -0.04 | 0.57 | 0.49 | 0.54 | 0.63 | 0.61 | 0.65 | 0.68 | 0.68 | 0.64 | 0.57 | 0.47 | 0.79 | 0.86 | 1.00 | Japan | ||||||||||||||||||
Japan | MSCI Japan IMI | 6.0 | 7.1 | 15.1 | -0.02 | 0.26 | 0.21 | 0.57 | 0.15 | 0.36 | 0.45 | 0.40 | 0.09 | 0.19 | 0.05 | 0.41 | 0.38 | 0.40 | 0.48 | 0.51 | 0.53 | 0.52 | 0.53 | 0.51 | 0.43 | 0.36 | 0.60 | 0.66 | 0.68 | 1.00 | United Kingdom |
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United Kingdom | MSCI UK IMI | 6.8 | 8.3 | 17.3 | 0.00 | 0.25 | 0.14 | 0.72 | 0.15 | 0.54 | 0.58 | 0.53 | -0.05 | 0.08 | -0.07 | 0.66 | 0.50 | 0.58 | 0.66 | 0.61 | 0.66 | 0.70 | 0.68 | 0.61 | 0.53 | 0.40 | 0.78 | 0.84 | 0.93 | 0.67 | 1.00 | Canada | ||||||||||||||||
Canada | MSCI Canada IMI | 6.9 | 8.9 | 20.0 | 0.03 | 0.33 | 0.16 | 0.73 | 0.15 | 0.48 | 0.56 | 0.49 | -0.01 | 0.13 | -0.02 | 0.54 | 0.46 | 0.48 | 0.83 | 0.75 | 0.81 | 0.83 | 0.73 | 0.66 | 0.54 | 0.40 | 0.77 | 0.82 | 0.80 | 0.62 | 0.84 | 1.00 | Australia | |||||||||||||||
Australia | MSCI Australia IMI | 7.2 | 9.7 | 22.4 | 0.02 | 0.36 | 0.23 | 0.73 | 0.16 | 0.55 | 0.62 | 0.56 | 0.01 | 0.16 | 0.01 | 0.51 | 0.47 | 0.51 | 0.67 | 0.70 | 0.71 | 0.74 | 0.83 | 0.78 | 0.58 | 0.47 | 0.78 | 0.81 | 0.83 | 0.65 | 0.83 | 0.84 | 1.00 | Developed Markets |
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Developed Markets | MSCI World IMI | 6.3 | 7.5 | 15.6 | -0.02 | 0.28 | 0.18 | 0.77 | 0.15 | 0.50 | 0.57 | 0.52 | -0.06 | 0.09 | -0.07 | 0.53 | 0.48 | 0.52 | 0.66 | 0.65 | 0.68 | 0.71 | 0.68 | 0.64 | 0.54 | 0.41 | 0.80 | 0.98 | 0.94 | 0.74 | 0.92 | 0.87 | 0.87 | 1.00 | Emerging Markets |
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EM | Emerging Markets | MSCI EM IMI | 5.9 | 8.1 | 20.8 | 0.06 | 0.32 | 0.22 | 0.72 | 0.16 | 0.55 | 0.59 | 0.55 | 0.04 | 0.18 | 0.02 | 0.51 | 0.46 | 0.48 | 0.69 | 0.68 | 0.71 | 0.74 | 0.78 | 0.73 | 0.54 | 0.46 | 0.78 | 0.75 | 0.83 | 0.67 | 0.80 | 0.83 | 0.85 | 0.83 | 1.00 | Global Equities | |||||||||||
GLOBAL | Global Equities | MSCI ACWI IMI | 6.3 | 7.5 | 15.8 | -0.01 | 0.29 | 0.19 | 0.78 | 0.15 | 0.52 | 0.59 | 0.54 | -0.05 | 0.10 | -0.06 | 0.54 | 0.49 | 0.53 | 0.68 | 0.67 | 0.70 | 0.73 | 0.71 | 0.67 | 0.55 | 0.42 | 0.81 | 0.96 | 0.94 | 0.75 | 0.92 | 0.88 | 0.89 | 1.00 | 0.87 | 1.00 | Natural Resources |
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REAL ASSETS | Natural Resources | S&P Global Natural Resources | 7.9 | 10.1 | 20.8 | 0.05 | 0.26 | 0.07 | 0.62 | 0.05 | 0.53 | 0.54 | 0.49 | 0.02 | 0.11 | -0.01 | 0.54 | 0.39 | 0.43 | 0.71 | 0.61 | 0.66 | 0.70 | 0.72 | 0.64 | 0.48 | 0.37 | 0.68 | 0.74 | 0.77 | 0.62 | 0.84 | 0.88 | 0.83 | 0.81 | 0.81 | 0.82 | 1.00 | Listed Real Estate |
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Listed Real Estate | MSCI ACWI IMI Core RE | 8.3 | 10.0 | 18.6 | -0.02 | 0.42 | 0.34 | 0.78 | 0.27 | 0.47 | 0.60 | 0.54 | 0.07 | 0.24 | 0.08 | 0.46 | 0.54 | 0.55 | 0.60 | 0.68 | 0.68 | 0.67 | 0.67 | 0.68 | 0.62 | 0.51 | 0.80 | 0.81 | 0.81 | 0.67 | 0.80 | 0.77 | 0.82 | 0.85 | 0.79 | 0.86 | 0.66 | 1.00 | Listed Infrastructure |
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Listed Infrastructure | S&P Global Infrastructure | 6.4 | 7.6 | 15.6 | 0.05 | 0.40 | 0.31 | 0.75 | 0.28 | 0.57 | 0.68 | 0.62 | 0.07 | 0.24 | 0.08 | 0.54 | 0.55 | 0.57 | 0.67 | 0.69 | 0.73 | 0.72 | 0.72 | 0.70 | 0.64 | 0.55 | 0.80 | 0.80 | 0.86 | 0.67 | 0.86 | 0.83 | 0.86 | 0.87 | 0.80 | 0.88 | 0.79 | 0.86 | 1.00 | Hedge Funds |
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ALTERNATIVES | Hedge Funds | HFRI Fund Weighted Composite | 4.5 | 4.7 | 6.2 | 0.00 | 0.26 | 0.10 | 0.75 | 0.12 | 0.44 | 0.50 | 0.44 | -0.08 | 0.05 | -0.09 | 0.51 | 0.43 | 0.45 | 0.66 | 0.63 | 0.66 | 0.73 | 0.68 | 0.59 | 0.48 | 0.33 | 0.78 | 0.84 | 0.83 | 0.68 | 0.85 | 0.88 | 0.84 | 0.89 | 0.85 | 0.90 | 0.84 | 0.76 | 0.82 | 1.00 | Private Equity |
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Private Equity | Cambridge Associates Global Private Equity | 9.6 | 11.5 | 19.7 | 0.00 | 0.16 | -0.08 | 0.70 | 0.03 | 0.42 | 0.50 | 0.39 | -0.13 | -0.02 | -0.16 | 0.58 | 0.57 | 0.50 | 0.67 | 0.60 | 0.63 | 0.68 | 0.66 | 0.57 | 0.54 | 0.21 | 0.69 | 0.87 | 0.77 | 0.61 | 0.77 | 0.79 | 0.78 | 0.85 | 0.76 | 0.84 | 0.71 | 0.71 | 0.73 | 0.74 | 1.00 | Private Credit |
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Private Credit | Cambridge Associates Global Private Credit | 6.9 | 7.5 | 10.5 | -0.01 | 0.16 | -0.08 | 0.76 | 0.02 | 0.41 | 0.48 | 0.37 | -0.13 | 0.03 | -0.16 | 0.60 | 0.57 | 0.52 | 0.71 | 0.61 | 0.64 | 0.74 | 0.69 | 0.57 | 0.53 | 0.20 | 0.74 | 0.80 | 0.77 | 0.58 | 0.79 | 0.82 | 0.79 | 0.81 | 0.78 | 0.81 | 0.69 | 0.75 | 0.76 | 0.71 | 0.90 | 1.00 |
Forecasts listed here represent total return forecasts for primary asset classes, annualized using geometric and arithmetic averages, where applicable. Forecast returns are based on estimates and reflect subjective judgments and assumptions. They are not necessarily indicative of future performance, which could differ substantially. It is not possible to invest in an index.
IMPORTANT INFORMATION: For Asia Pacific and EMEA markets, this information is directed to institutional, professional and wholesale clients or investors only and should not be relied upon by retail clients. The information contained herein is intended for use with current or prospective clients of Northern Trust Investments, Inc (NTI) or its affiliates. The information is not intended for distribution or use by any person in any jurisdiction where such distribution would be contrary to local law or regulation. NTI or its affiliates may have positions in and may effect transactions in the markets, contracts and related investments different than described in this information. This information is obtained from sources believed to be reliable, its accuracy and completeness are not guaranteed, and is subject to change. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice and does not take into account all the circumstances of each investor.
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CMA model expected returns are based on IPC forecasted returns and reflect Northern Trust’s Investment Policy Committee’s forward-looking annual capital market assumptions. The Capital Market Assumptions Working Group, a subset of IPC members, publishes its assumptions as a white paper report. Forecasted returns are annual returns (geometric basis). The model cannot account for the impact that economic, market and other factors may have on the implementation and ongoing management of an actual investment strategy. Model outcomes do not reflect actual trading, liquidity constraints, fees, expenses, taxes and other factors that could impact future returns. The model assumptions are passive only. References to expected returns are not promises or even estimates of actual returns an investor may achieve. The assumption, views, techniques and estimates set out are provided for illustrative purposes only. Forecasts of financial market trends that are based on current market conditions constitute the CMA Working Group judgment and are subject to change without notice. “Expected” or “alpha” return estimates are subject to uncertainty and error. The ability to achieve similar outcomes is subject to risk factors over which Northern Trust may have no or limited control.
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