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Capital market assumptions: A comprehensive global approach for the next 20 years
We believe that asset returns over the next 20 years will be lower than their long-term averages, with stocks outperforming bonds (but by a smaller historical margin) and emerging markets generating the highest returns.
Key Takeaways
- Our secular return expectation for U.S. equities is below the long-term average due to lower growth potential and higher starting valuations.
- Our fixed income returns are only slightly lower than those of U.S. equities, reflecting the broad alignment of starting bond yields with our secular views.
- As a result, we continue to expect U.S. stocks to outperform bonds, but by a smaller margin relative to history.
- We expect emerging markets to deliver robust secular returns and view commodities as an important source of portfolio diversification.
- Our capital market assumptions can help inform strategic asset allocation decisions by focusing on how economic and financial market inputs influence asset returns over long periods of time.
Our capital market assumptions framework focuses on the specifics of how economic and financial market inputs influence asset returns over long periods of time. While other approaches assume the connection between GDP growth and asset returns is either perfect or non-existent, our framework is built on two beliefs:
- There is a principal relationship between economic trends and asset-class performance.
- By deriving country-specific assumptions, we generate estimates that are global and adaptive across diverse economies and asset categories.
For illustrative purposes only. Source: Fidelity Investments (AART).
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Capital market assumptions: A comprehensive global approach for the next 20 years
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Past performance is no guarantee of future results.
These materials contain statements that are "forward-looking statements," which are based upon certain assumptions of future events. Actual events are difficult to predict and may differ from those assumed. There can be no assurance that forward-looking statements will materialize or that actual returns or results will not be materially different than those presented.
Information presented herein is for discussion and illustrative purposes only and is not a recommendation or an offer or a solicitation to buy or sell any securities. Views expressed are as of 8/28/25, based on the information available at that time, and may change based on market and other conditions. Unless otherwise noted, the opinions provided are those of the authors and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.
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