Capital Market Assumptions: Redefined

Man Group

Henry Neville

Research

33 Pages

Man Group critiques the conventional use of 10-year Capital Market Assumptions (CMAs), arguing they’re often inaccurate and misapplied. They present a four-method framework—historic, conditional, theoretical, and consensus approaches—for investors to develop more robust, transparent assumptions tailored to their specific strategic objectives.

Key Takeaways

Timeframe oversimplification: A one-size-fits-all, 10-year CMA base rate misguides asset allocation decisions.
Multi-method framework: Better CMAs arise from blending historic, conditional, theoretical, and consensus models.
Purpose-driven use: CMAs must reflect intended use—liability matching versus ultra-long strategic planning—to drive SAA wisely.
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