Long-Term Investment Perspectives | Spring 2025

08 May 2025 by National Bank Investments
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NBI's CIO Office presents the Long-Term Investment Perspectives (Spring 2025 edition)

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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 4.8% for a benchmark balanced portfolio over a 10-year investment horizon, which is lower than the realized return of 6.6% over the past 10 years. This forecast is also lower than the 5.9% we anticipated in the Fall 2024 update, with a slightly less favorable outlook for both stocks and bonds. 

Our model now projects an annual return of 3.5% for the Canadian fixed-income universe over the next 10 years, with the forecast being pulled down by a lower Bank of Canada policy rate and lower starting bond yields relative to six months ago. On the equity side, the expected 10-year annual return of 4.8% for our equity benchmark² – a performance below the historical average – is mainly caused by elevated valuations, especially in the United States. 

Ultimately, beyond the inevitable short-term fluctuations, expectations for a balanced portfolio remain largely positive for long-term investors, albeit slightly lower than the above-average returns achieved in recent years.

The information and the data supplied in the present document, including those supplied by third parties, are considered accurate at the time of their printing and were obtained from sources which we considered reliable. We reserve the right to modify them without advance notice. This information and data are supplied as informative content only. No representation or guarantee, explicit or implicit, is made as for the exactness, the quality and the complete character of this information and these data. The opinions expressed are not to be construed as solicitation or offer to buy or sell shares mentioned herein and should not be considered as recommendations.

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