Northern Trust Asset Management - Tue, 02/18/2025 - 22:37

Capital Market Assumptions: 2025 Edition

What it is

Every year, our Capital Market Assumptions Working Group gathers to develop long-term return forecasts across asset classes, guided by broad investment themes.

Why it matters

This long-term outlook can aid investors as they build their strategic portfolio allocations.

Where it's going

We forecast annualized 10-year returns of 7.1% for global equities, a 5.6% for U.S. high yield bonds and 10.1% for private equity.

We expect AI, the energy transition and persistent globalization to impact markets long-term.

Over the next 10 years, we believe U.S. equities will continue to outperform developed markets outside the U.S., and emerging market stocks should provide diversification. While cash returns may decline on central bank rate cuts, strong fundamentals likely will support high yield returns. Artificial intelligence (AI) and other tech opportunities likely will support private equity performance.

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Contacts

Northern Trust Asset Management

Northern Trust Asset Management is a global investment manager that helps investors navigate changing market environments, so they can confidently realize their long-term objectives.
Entrusted with $1.3 trillion in assets under management as of December 31, 2024, we understand that investing ultimately serves a greater purpose and believe investors should be compensated for the risks they take — in all market environments and any investment strategy. That’s why we combine robust capital markets research, expert portfolio construction and comprehensive risk management in an effort to craft innovative and efficient solutions that seek to deliver targeted investment outcomes.
As engaged contributors to our communities, we consider it a great privilege to serve our investors and our communities with integrity, respect and transparency.

Chris Doell, CFA, CIA
Director—Insurance Practice
jcd2@ntrs.com
312-444-7177

Andrew Coupe
Director—Insurance Solutions
ajc17@ntrs.com
845-709-9655

www.northerntrust.com/united-states/what-we-do/investment-management
50 S LaSalle St
Chicago, IL 60603

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