Our team at Invesco Investment Solutions remains quite positive on our long-term capital market assumptions (CMAs). Most of the 170+ assets we cover are expected to return more in the coming decade than the last decade.
As central banks have begun to unwind years of excess liquidity through quantitative tightening and rapid rate hikes, only one thing is certain, cash has become more valuable. Investors can now be prudent in their risk taking and, in nominal terms, the risk-free rate actually returns something for savers.
Fixed income assets, particularly long duration government bonds, have corrected meaningfully in 2022, and while major economies have yet to register a technical recession, cash flows have been discounted by higher interest rates resulting in drawdowns within overvalued portions of equity markets.
Invesco Investment Solutions develops capital market assumptions (CMAs) that provide long-term estimates for the behaviour of major asset classes globally.
The assumptions, which are based on a 10-year investment time horizon, are intended to guide strategic asset allocations. For each selected asset class, we develop assumptions for expected return, standard deviation of return (volatility) and correlation with other asset classes.
