Market Update

Capital market assumptions | Q1 2025

April 14, 2025
Invesco
a man looking through binoculars
Q1 I Key Takeaways
1

We have witnessed a dramatic repricing of risk in the first few months of 2025. Following the “Liberation Day” tariffs, US equity markets have posted their 16th worst two-day period since 1928.

2

The once unstoppable US large cap equity market has underperformed its global counterparts since Trump’s election on November 4, 2024, with a rotation into non-US equities and “risk-off” assets underway.

3

Being defensive and flexible is key for investors due to volatile trade policies. Risks in US equity markets, such as high valuations and market concentration are being highlighted.

Invesco 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.

Our CMAs include:
  • Notable changes in our long-term asset class expectations
  • Global and local market commentary
  • Strategic and tactical asset allocation outlooks and investment implications
  • 10-year asset class estimated risk/return attribution analysis

Related insights

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

  • Investment risks

    The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    Important information

    Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.

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  • Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.