The latest edition of the Global Investment Returns Yearbook, released in 2024, reveals a significant shift in future investment returns. While returns are projected to be lower than previous generations, they are expected to be approximately 200 basis points higher than forecasts made two years ago.
This report is a collaboration between UBS Investment Bank Research and the Chief Investment Office of UBS Global Wealth Management, showcasing the integration of UBS and Credit Suisse. The Yearbook draws on the expertise of renowned academics from London Business School and Cambridge University to provide authoritative insights into historical long-run returns.
A notable addition to this year"s Yearbook is a comprehensive chapter dedicated to corporate bonds and the associated credit premium. Corporate bonds represent a substantial asset class, nearly half the size of global equities, with a market value of around USD 44 trillion. The chapter presents long-term evidence on corporate bonds dating back to the 1860s in both the US and UK, highlighting the significant credit risk premium even for high-quality corporate bonds. It explores historical default and recovery rates, offering insights into yield spreads and default rates. The chapter emphasizes that corporate bonds are a distinct asset class that requires careful consideration in investment strategies.
Dan Dowd, Head of Global Research & Evidence Lab at UBS Investment Bank, expressed confidence in the newly formed organization following the acquisition of Credit Suisse. He emphasized that this integration has strengthened UBS"s position to deliver expert insights and guidance to a broader client base. Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, highlighted the Yearbook"s role as an essential resource for understanding historic asset class performance and the benefits of diversification and disciplined asset allocation.
The Global Investment Returns Yearbook covers 35 markets and five composite indexes, providing a comprehensive look at global markets. It includes data on stocks, bonds, bills, inflation, and currencies, allowing for a detailed examination of historical performance. The Yearbook"s extensive historical analysis can inform strategic decision-making in portfolios as investors face an evolving economic landscape.
As the financial landscape continues to evolve, the insights provided in the Global Investment Returns Yearbook serve as a critical resource for investors. The Yearbook equips investors with the knowledge needed to navigate the complexities of the current market environment and offers enhanced expertise and insights through the integration of UBS and Credit Suisse. Understanding historical trends and their implications for future performance is essential for crafting resilient investment strategies.