Robeco lays out a five-year outlook arguing that markets are distorted by central bank policy and elevated asset prices, creating a “hall of mirrors” where signals are harder to interpret. It suggests a recession is inevitable and that future returns across most asset classes will fall below historical norms, challenging conventional portfolio assumptions.
Brave Real World: 5-Year Outlook 2021 – 2025
Robeco
Laurens Swinkels, Peter van der Welle
Research
109 Pages
Key Takeaways
Recession Inevitable View: Robeco expects a downturn within 5 years, with over USD 15 trillion in negative-yielding bonds signaling late-cycle conditions and weaker forward returns.
Lower Returns Across Assets: Developed equities are projected to return just 3.25% annually, while investment grade credit sits near 0.25%, both well below long-term historical averages.
Bond Market Distortions: German government bonds are expected to deliver -1.75%, highlighting how extreme valuations and policy intervention have compressed yields below cash alternatives.
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