Robeco examines how a maturing post crisis recovery, rising inflation pressures, and valuation extremes could shape asset returns through 2020. The paper argues longer horizons may be less uncertain than short term forecasts and suggests normalization could produce surprisingly weak bond outcomes despite stronger growth.
Expected Returns 2016 to 2020
Robeco
Research
120 Pages
Key Takeaways
Negative Bond Outlook: European sovereign bonds are projected to return -3% annually as German 10 year yields rise from 0.5% to 4.0% by 2020.
Equities Still Preferred: Developed market equities are expected to return 5.5% annually, supported by earnings growth and a 2.5% dividend yield buffer.
Inflation Reemergence Risk: The central scenario assigns a 70% probability to stronger growth and inflation, with US inflation peaking near 3% and Europe near 2.5%.
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