Insight Long-term capital market assumptions quarterly update

• 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.
• The once unstoppable US large cap equity market has underperformed its global counterparts since Trump’s election on November 4th, 2024, with a rotation into non-US equities and “risk-off” assets underway.
• Being both defensive and flexible is key for investors during these moments as trade policies could be reversed just as quickly as they have been imposed. We have written extensively about the risks looming over US equity markets for quite some time, with elevated valuations and market concentration being key themes of our capital market assumption (CMA) publications.

Invesco Solutions provides forecasts for 170+ assets in over 20 currencies, including 10 private assets. For additional CMA data, views, or analysis, please reach out to your Invesco representative.

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. 

Invesco Solutions develops CMAs that provide long-term estimates for the behavior of major asset classes globally. The team is dedicated to designing outcome-oriented, multi-asset portfolios that meet the specific goals of investors. The assumptions, which are based on 5- and 10-year investment time horizons, are intended to guide these strategic asset class allocations. For each selected asset class, we develop assumptions for estimated return, estimated standard deviation of return (volatility), and estimated correlation with other asset classes. This information is not intended as a recommendation to invest in a specific asset class or strategy, or as a promise of future performance. Estimated returns are subject to uncertainty and error, and can be conditional on economic scenarios. In the event a particular scenario comes to pass, actual returns could be significantly higher or lower than these estimates.