Deutsche Bank examines how demographics, globalization, debt, and political fragmentation may reshape long term asset returns after a 35 year economic cycle. The paper argues investors risk misreading future markets by extrapolating declining bond yields, expanding labor forces, and globalization trends that may already be reversing.
Long-Term Asset Return Study: An Ever Changing World
Deutsche Bank
Jim Reid
Research
91 Pages
Key Takeaways
Demographic Peak Reversal: The productive 35 to 54 age cohort has declined across major economies since 2010, challenging the growth backdrop that supported asset returns for roughly 35 years.
Bond Return Compression: Real annualized developed market bond returns exceeded 10% during the 1980s but turned negative in several countries after 2008 as yields approached historic lows.
Europe’s Structural Strains: Youth unemployment exceeded 40% in parts of Southern Europe while several Eurozone economies underperformed Germany in both GDP growth and equity returns after 1999.
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