J.P. Morgan: Large caps step back, bond returns improve in 2019

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J.P. Morgan: Large caps step back, bond returns improve in 2019 – Pensions & Investments











































































<br /> <!-- Swiftype Variables --> <br /> In its 2019 capital market assumptions release, J.P. Morgan Asset Management estimates that investors can expect a 5.25% return from U.S. large-cap equities over the 10- to 15-year horizon, down from its 5.5% estimate in 2018.Charles McGrath<br /> <br /> <iframe class="highcharts-iframe" src="https://cloud.highcharts.com/embed/aUgmyrCFZ/" style="border: 0; width: 100%; height: 500px"></iframe><br /> <br /> In its 2019 capital market assumptions release, J.P. Morgan Asset Management? estimates that investors can expect a 5.25% return from U.S. large-cap equities over the 10- to 15-year horizon, down from its 5.5% estimate in 2018. Large caps were the only asset class the investment manager revised lower from the year before. U.S. investment-grade corporate bonds saw the largest upward revision to 4.5% from 3.5%. </p> <p>The decline in the large-cap return estimate falls below the asset class’s long-term average. Emerging market equity? return assumptions were revised upward by 50 basis points to 8.5%. Return assumption increases in U.S. fixed income are reflective of the overall upward trend in interest rates, what the report refers to as U.S. rate normalization.</p> <p>J.P. Morgan notes that its estimates, of returns and corresponding volatility, produce higher Sharpe ratios for fixed-income assets, particularly U.S. investment-grade, while Sharpe ratios fell slightly for U.S. equity. The firm also sees improving Sharpe ratios for emerging market debt and global credit; however, those figures do not account for increased liquidity risk in times of market stress. </p> <p>

































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