J.P. Morgan Asset Management outlines how shifting economic regimes marked by higher inflation, stronger growth, and rising rates reshape long-term asset returns and portfolio construction. It argues the classic 60/40 still works but needs adaptation, with alternatives and active strategies playing a larger role as returns normalize around historical averages.
25th Annual Edition – Long-Term Capital Market Assumptions
J.P. Morgan Asset Management
Research
130 Pages
Key Takeaways
60/40 Still Viable: A global 60/40 portfolio is projected to return about 6.4% annually over 10–15 years, roughly in line with long-term historical averages despite higher rates.
Alternatives Boost Returns: Adding a 30% allocation to alternatives lifts expected portfolio returns to around 6.9%, improving diversification and risk-adjusted outcomes.
Higher Rates Reset: Global bonds delivered about 4.3% annual returns historically, but higher starting yields now point to stronger forward-looking fixed income performance.
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