Invest
Investment returns hitting GFC territory
New research has predicted “compressed market returns” over the medium term, as the current outlook for equities and bonds nears post-GFC lows.
Investment returns hitting GFC territory
New research has predicted “compressed market returns” over the medium term, as the current outlook for equities and bonds nears post-GFC lows.
In its latest Capital Market Assumptions report, the BlackRock Investment Institute said bonds and equities will likely deliver compressed returns over the next five years, pulled down by stretched valuations and moderate economic growth.
According to the report, the five-year expected return for US large-caps is 4.3 per cent, with US small-caps delivering an expected 4.8 per cent. Emerging markets equities, from a US perspective, will likely deliver 6.5 per cent.
Further, from a European standpoint, global small-caps are set to return 4.6 per cent, with Economic Monetary Union (EMU) large-caps delivering 6.0 per cent. A bright spot remains in global private equity, expected to return 7.5 per cent.
In terms of earnings trends, the report estimates earnings in the US and Japan to be above their long-term average. However, emerging markets and Europe will come in below trend.
The report said equities are set to outperform fixed income in the medium term.
“[The report's] economic base case and the valuation gap between equities and bonds support the case for strong performance from equities relative to fixed income over the next five years," it said.
US cash, the report noted, is expected to return 1.5 per cent over the medium term. Global ex-US treasuries are set to deliver 1.0 per cent, US credit (all maturities) 2.7 per cent, US treasuries (all maturities) 1.5 per cent and US dollar emerging markets debt 4.6 per cent.
EMU corporate bonds will likely deliver 0.5 per cent, EMU cash 0.0 per cent and EMU (all maturities) 0.1 per cent.
BlackRock’s long-term assumptions, however, remain more positive than those for the medium term.
Notably, “10-year-plus capital market assumptions are based on normalised valuations and interest rate levels, and are driven by five risk premia: equity, duration, inflation, credit and illiquidity", the report stated.
RELATED ARTICLES
Property
Multigenerational living is moving mainstream: how agents, developers and lenders can monetise the shift
Australia’s quiet housing revolution is no longer a niche lifestyle choice; it’s a structural shift in demand that will reward property businesses prepared to redesign product, pricing and ...Read more
Property
Prestige property, precision choice: a case study in selecting the right agent when millions are at stake
In Australia’s top-tier housing market, the wrong agent choice can quietly erase six figures from a sale. Privacy protocols, discreet buyer networks and data-savvy marketing have become the new ...Read more
Property
From ‘ugly’ to alpha: Turning outdated Australian homes into high‑yield assets
In a tight listings market, outdated properties aren’t dead weight—they’re mispriced optionality. Agencies and vendors that industrialise light‑touch refurbishment, behavioural marketing and ...Read more
Property
The 2026 Investor Playbook: Rental Tailwinds, City Divergence and the Tech-Led Operations Advantage
Rental income looks set to do the heavy lifting for investors in 2026, but not every capital city will move in lockstep. Industry veteran John McGrath tips a stronger rental year and a Melbourne ...Read more
Property
Prestige property, precision choice: Data, discretion and regulation now decide million‑dollar outcomes
In Australia’s prestige housing market, the selling agent is no longer a mere intermediary but a strategic supplier whose choices can shift outcomes by seven figures. The differentiators are no longer ...Read more
Property
The new battleground in housing: how first-home buyer policy is reshaping Australia’s entry-level market
Government-backed guarantees and stamp duty concessions have pushed fresh demand into the bottom of Australia’s price ladder, lifting values and compressing selling times in entry-level segmentsRead more
Property
Property 2026: Why measured moves will beat the market
In 2026, Australian property success will be won by investors who privilege resilience over velocity. The market is fragmenting by suburb and asset type, financing conditions remain tight, and ...Read more
Property
Entry-level property is winning: How first home buyer programs are reshaping demand, pricing power and strategy
Lower-priced homes are appreciating faster as government support channels demand into the entry tier. For developers, lenders and marketers, this is not a blip—it’s a structural reweighting of demand ...Read more
Property
Multigenerational living is moving mainstream: how agents, developers and lenders can monetise the shift
Australia’s quiet housing revolution is no longer a niche lifestyle choice; it’s a structural shift in demand that will reward property businesses prepared to redesign product, pricing and ...Read more
Property
Prestige property, precision choice: a case study in selecting the right agent when millions are at stake
In Australia’s top-tier housing market, the wrong agent choice can quietly erase six figures from a sale. Privacy protocols, discreet buyer networks and data-savvy marketing have become the new ...Read more
Property
From ‘ugly’ to alpha: Turning outdated Australian homes into high‑yield assets
In a tight listings market, outdated properties aren’t dead weight—they’re mispriced optionality. Agencies and vendors that industrialise light‑touch refurbishment, behavioural marketing and ...Read more
Property
The 2026 Investor Playbook: Rental Tailwinds, City Divergence and the Tech-Led Operations Advantage
Rental income looks set to do the heavy lifting for investors in 2026, but not every capital city will move in lockstep. Industry veteran John McGrath tips a stronger rental year and a Melbourne ...Read more
Property
Prestige property, precision choice: Data, discretion and regulation now decide million‑dollar outcomes
In Australia’s prestige housing market, the selling agent is no longer a mere intermediary but a strategic supplier whose choices can shift outcomes by seven figures. The differentiators are no longer ...Read more
Property
The new battleground in housing: how first-home buyer policy is reshaping Australia’s entry-level market
Government-backed guarantees and stamp duty concessions have pushed fresh demand into the bottom of Australia’s price ladder, lifting values and compressing selling times in entry-level segmentsRead more
Property
Property 2026: Why measured moves will beat the market
In 2026, Australian property success will be won by investors who privilege resilience over velocity. The market is fragmenting by suburb and asset type, financing conditions remain tight, and ...Read more
Property
Entry-level property is winning: How first home buyer programs are reshaping demand, pricing power and strategy
Lower-priced homes are appreciating faster as government support channels demand into the entry tier. For developers, lenders and marketers, this is not a blip—it’s a structural reweighting of demand ...Read more
