Ninety One’s Capital Market Assumptions framework focuses on the key drivers of long-term performance. We do this to better understand possible future returns, enriching discussions with our clients.
Our framework emphasises income payments across asset classes, as they are both readily measured and pivotal in determining returns. In addition, long-term history is available, and income is less subject to manipulation than accounting metrics.
We divide returns into three components. The first – income – is a tangible, known entity, but the others are subject to material misestimation:
| 1 | Income Yield is historically the single most important explanatory factor for income-generating assets |
| 2 | Growth The extent to which income is expected to change over time |
| 3 | Revaluation The price per unit of income likely to apply at the end of the period (typically, 10 years) |
Capital Market Assumptions - October 2025
Key takeaways
Over the past six months, financial markets have demonstrated remarkable resilience, shaking off the jolt to the global trading system engineered by the US administration, along with growing concerns about fiscal sustainability and ongoing geopolitical crises. Against this backdrop, global equity markets have reached new highs, credit spreads have narrowed to historic lows and calm has largely returned to sovereign bond markets. Investors who maintained their resolve and held or even added to their risk positions during this period have been richly rewarded.
The medium-term outlook looks less promising. We firmly believe a focus on starting valuations is crucial when considering returns on a 10-year horizon. As a result, our latest Capital Market Assumptions present a picture of muted expected returns in aggregate. We anticipate that a traditional 60% global equity, 40% global government bond portfolio, hedged into US dollars, will deliver a 3.5% annualised return for the next decade in nominal terms. This represents a significant drop in prospective returns and an outcome that would place it in the bottom decile of historic 10-year outcomes.
We continue to see a need for considerable value-add from asset allocation and security selection decisions, as well as from identifying investments that will benefit from structural growth tailwinds to achieve investment objectives.
Forecasts are inherently limited and modelling involves risks, assumptions and uncertainties; they are forward-looking and are not guarantees nor a reliable indicator of future results. Actual returns could be materially higher or lower than projected. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance.
Source: Ninety One proprietary Capital Market Assumptions as at 30 September 2025. These estimates are gross of fees (returns can be reduced by management fees and other expenses incurred) and reflect the view of Ninety One’s multi-asset team, whilst the views of other teams across Ninety One may differ. Details on our Capital Market Assumptions methodology available upon request.
General risks. Forecasts are inherently limited and modelling involves risks, assumptions and uncertainties, they are forward looking and are not guarantees nor a reliable indicator of future results. Actual returns could be materially higher or lower than projected. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. The value of investments, and any income generated from them, can fall as well as rise. Costs and charges will reduce the current and future value of investments. Where charges are taken from capital, this may constrain future growth. Past performance is not a reliable indicator of future results. If any currency differs from the investor's home currency, returns may increase or decrease as a result of currency fluctuations. Investment objectives and performance targets are subject to change and may not necessarily be achieved, losses may be made. Environmental, social or governance related risk events or factors, if they occur, could cause a negative impact on the value of investments.
