Saturday, 20 March 2021

Crédit-Suisse Global Investment Returns Yearbook 2021

The Crédit Suisse Global Investment Returns Yearbook 2021 was released early March. The summary version is available at the Crédit Suisse Research web site. The current edition includes the complete chapter on emerging markets.

The summary starts with a historical perspective on the evolution of equity and sovereign debt markets over the last 121 years, and the industrial transformation that accompanied this. The next section explains why a long-term perspective is important and summarizes the long-run returns on stocks, bonds, bills and inflation since 1900. This is followed by a discussion on currencies and their impact on investment returns. The section on investment risk looks at dispersion in stock and bond markets – on both the upside and downside – culminating with global evidence on the historical risk premium.

Focus then moves to prospective returns, showing how returns vary with real interest rates, looking at how expected returns vary over time and across markets, reflecting interest and inflation rates. In a discussion of factor investing, there is an overview of the historical rewards from size, value, income, momentum, volatility and other factors.

An interesting view is that the investment instruments: equities, bonds and a 70:30 blend which rewarded the baby boom generation, do not provide a comparable return projection for their millennial grand-children.

Past annual real returns in developed markets and prospective returns

Chapter 8 of the printed Yearbook examines emerging markets in detail and this chapter is reproduced in this Summary Edition. Topics include the nature, importance, evolution and profitability of emerging market investing, and studies of factor investing and rotation strategies within the developing world.

Press release at Crédit-Suisse with link to PDF and details to order a printed copy.

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