Capital market assumptions - Q4 2018

Latest updates to the Invesco Global Solutions team’s long-term asset class forecasts

Nov 9, 2018 | Invesco Global Solutions team

Better dividend yields for Asia Pacific ex-Japan equities boosted return estimates significantly for the asset class in Invesco Global Solutions’ latest update to its capital market assumptions (CMAs). The yield on the MSCI Asia Pacific ex-Japan is now at a relatively high 2.88% as of the end of the third quarter of 2018, as companies in the region increased their dividends significantly this year.

For fixed income, long-term US Treasuries saw their return estimates rise, as the US Federal Reserve’s signaling of more rate hikes flattened the yield curve for US Treasuries.

Invesco Global Solutions’ CMAs provide long-term forecasts for the behavior of major asset classes globally. The team is dedicated to designing outcome-oriented, multi-asset portfolios that meet the specific goals of investors. The assumptions, which are based on a 10-year investment time horizon, are intended to guide these strategic asset class allocations.

For each selected asset class, we develop assumptions for expected return, standard deviation of return (volatility) and correlation with other asset classes.

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