Overview
Twice a year, we update our Long-Term Market Expectations (LTMEs) for major asset classes over a 10-year and 30-year investment horizon. Based on our building-block methodology (10-year) and risk premia methodology (30-year), these projections are the foundation of National Bank Investments’ strategic asset allocation (SAA) and portfolio construction.
For the current edition, this results in an anticipated annual return of 4.3% for a benchmark balanced portfolio¹over a 10-year investment horizon, which is lower than the realized return of 8.3% over the past 10 years. This forecast is also slightly lower than the 4.8% we anticipated in the Spring 2025 update, with a less favorable outlook for equitiesreflecting elevated valuations on a historical basis.
Our model still projects an annual return of 3.5% for the Canadian fixed-income universe over the next 10 years, about the same as the current yield-to-maturity. On the equity side, while the anticipated annual return of 4.3% for our benchmark index² is well below the historical average, the outlook remains more favorable for Canada and Emerging Markets.
Ultimately, beyond the inevitable short-term fluctuations, expectations for a balanced portfolio remain largely positive for long-term investors, albeit lower than the above-average returns achieved in recent years.