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Capital Group Issues Capital Market Assumptions
[February 23, 2024]

Capital Group Issues Capital Market Assumptions

2024 report notes outlook is positive for long-term investors; assumptions are higher for bonds

LOS ANGELES, Feb. 23, 2024 /PRNewswire/ -- Capital Group, one of the world's largest and most experienced active investment managers, issued its 2024 Capital Market Assumptions (CMAs), which represent the company's long-term expectations for returns, as well as correlations and volatilities of major asset classes over a 20-year time horizon. Capital Group's CMAs serve as the foundational inputs for the quantitative models that inform the firm's solutions offerings, including model portfolios, and its target date series, which serves nearly 10 million US households.

"Overall, the outlook is still bright for long-term investors and bonds are better poised to play their role as an equity diversifier in the years ahead," said Maddi Dessner, Head of Global Asset Class Services, Capital Group. "At the same time, strong gains across markets over the past year have tempered our expectations for equity returns relative to our 2023 estimates."

Based on its 2024 Capital Markets Assumptions, Capital Group expects: 

  • 6.9% annualized return for U.S. equities over a 20-year horizon, supported by estimates of GDP growth greater than 2%, increased innovation and enhanced productivity gains. 
  • In fixed income, higher starting yields will likely translate into higher expected returns across many areas of fixed income, as global central bank policies remain focused on mitigating and reversing inflationary pressures.


20-year expected returns (%)

 2024 Estimates

20-year expected returns (%)

2023 Estimates

U.S. equity



Non-U.S. developed markets equity



Emerging markets equity



Fixed Income

20-year expected returns (%)

2024 Estimates

20-year expected returns (%)

2023 Estimates

U.S. Treasury intermediate term






U.S. aggregate



U.S. high yield



Emerging markets debt (USD)



U.S. corporate



Cash (USD)



Source: Capital Group. Year-end expected returns 2023 are as of December 31, 2023, with valuations as of September 30, 2023.

  • Long-run inflation will trend toward central bank targets, averaging between 2.0% and 2.25% in developed markets and 2.4% in emerging markets.

  • Key drivers of global economic growth should include infrastructure investment, the move toward green energy and technological advances (especially those related to artificial intelligence).

  • The U.S. dollar could depreciate 70 basis points against major currencies over the 20-year horizon. This is 30 basis points lower than the depreciation forecasted last year.

"Central to our approach in developing solutions for our clients is that the analysis starting point matters and we must assess a variety of asset class variables on a granular level, in order to plan for the long term," said Dessner. "These assumptions reflect our forward-looking views spanning multiple market cycles and are meant to capture the return and volatility of asset classes within a total portfolio context."

Capital Group's 2024 Capital Market Assumptions are available upon request.

About Capital Group

Capital Group, home of American Funds, has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research, and individual accountability since 1931.

As of December 31, 2023, Capital Group manages more than $2.5 trillion in equity and fixed income assets for millions of individuals and institutional investors around the world. Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.

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This analysis represents the views of a small group of investment professionals based on their individual research and are approved by the Capital Market Assumptions Oversight Committee. They should not be interpreted as the view of Capital Group as a whole. As Capital Group employs The Capital System, the views of other individual analysts and portfolio managers may differ from those presented here. They are provided for informational purposes only and are not intended to provide any assurance or promise of actual returns. They reflect long-term projections of asset class returns and are based on the respective benchmark indices, or other proxies, and therefore do not include any outperformance gain or loss that may result from active portfolio management. Note that the actual results will be affected by any adjustments to the mix of asset classes. All market forecasts are subject to a wide margin of error.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.

Media Contact 

Natalie Marin (Los Angeles)
+1 (213) 615-4508

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