Monday 2 March 2020

Global Investment Returns Yearbook 2020

The Crédit Suisse Global Investment Returns Yearbook 2020 was released last week. The summary version is available at the Crédit Suisse Research web site.

The introductory page draws a perspective on the main chapter of ESG (environment, social, governance) revolution which increasingly is orienting sustainability-aware investors. It also provides the link to the summary version PDF.

A second - and recurring chapter - is 'Investing for the long term' is emphasizing how much the US focus in most investment guidelines introduces a long time survival bias. Global equity returns often are overstated and true returns are considerably lower because of markets that were completely wiped out (such as Imperial Russia and China) or suffered severe setbacks, hampering their long term returns to the present day among which the former Austro-Hungarian empire and Portugal.

The shift of industry weightings may add another aspect of survivor bias to long term returns statistics. Yet, the research in the 2015 Yearbook already indicated that investors may have placed too high an initial value on new technologies, overvaluing the new, and undervaluing the old. An industry value rotation strategy helped lean against this tendency and had generated superior returns.


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