Investors expect total annual returns of 10.7% over the next five years, according to a major new global study.
Regionally, returns expectations were highest in the Americas, at 12.4%. In Asia, investors expect 11.5% and the figure was lowest in Europe at 9.0%.
The returns include growth in their money, as well as any income paid out in the form of dividends and interest from a variety of investments including cash, bonds, property funds and equities.
The findings were part of the Schroders Global Investor Study (GIS) 2019, which measured the views of over 25,000 investors in 32 countries. The expectations are higher than in the 2018 study, when the investors’ forecast was for 9.9% a year.
Investors’ expectations appear optimistic. For instance, in the last five years global stocks, as measured by the MSCI World Index, have returned 6.7% annually. Longer-term, the Barclays Equity-Gilt Study shows that even stock market returns over more than 100 years have been around 5% annually. The historic performance of markets does not offer a guide to future returns.
At a country level, investors in Argentina on average expect the highest returns, at 15.8% a year. Expectations in other emerging countries were also high, with investors in Indonesia (15.5%), Brazil (14.9%), Thailand (15.0%) and India (14.3%) all looking for average annual returns in excess of 14% between now and 2024.
The results for US investors reflect a sharp increase in optimism. They expect annual returns of 10.3% over the next five years, up from 8.5% in the 2018 study.
In Europe, Russian investors expect the most at 12.5%. However, the European region as a whole expects a much lower return (9.0%), with Belgium having the world’s lowest expectation at 6.5%.
A full list of countries and their average expected annual investment returns over the next five years is shown below. Also shown is how stock markets have performed historically for each country.
Investors’ overall return expectations for the next five years, exceed stock market returns achieved in nearly all countries over the past five years.
Only in Russia, Denmark and the Netherlands are expectations lower than the actual performance of recent years.
|
