Long-Term Expected Returns

in light of the recent policy announcements

With Isabelle Mateos y Lago, Group Chief Economist, BNP Paribas and Guy Ertz, Deputy Global CIO, BNP Paribas Wealth Management

Guy Ertz, Deputy Global Chief Investment Officer, presents his report with a contextualised update of long-term expected returns for each asset class.

The most significant changes in the long-term drivers of expected returns over the past year have been the German government’s announcement to launch a massive infrastructure investment programme and the decision by EU countries to increase defence spending.

The EU authorities also plan to deregulate key sectors. These measures align with the recommendations in the 2024 Draghi Report that aim to increase the productivity and growth potential of the eurozone’s economy. We have thus decided to revise up our potential economic growth estimates for the eurozone from 0.75% to 1%.

This has an impact on the long-term expected returns of eurozone bonds and equities. We also revise up the expected returns of equities in the UK and Japan as well as listed real estate.

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( PDF - 410.8KB )

Deputy Global Chief Investment Officer,

BNP Paribas Wealth Management

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