JP Morgan Lifts Long-Term Return Forecasts for Traditional Portfolios

The bank’s 31st edition of its Long-Term Capital Market Assumptions report identifies three primary drivers for the outlook: the rise of economic nationalism, the rapid diffusion of technological innovation, and a fundamental reconfiguration of global capital deployment. For portfolios incorporating a 30 percent allocation to alternative assets—the so-called 60/40+ strategy—projected returns climb to 7.5 percent. Grace Peters, global co-head of investment strategy at JP Morgan Private Bank, emphasized that while returns remain central, current market dispersion offers significant advantages to those maintaining a disciplined strategic asset allocation.

Technological progress, specifically an AI-driven investment cycle extending to 2040, is expected to lift total factor productivity by 50 basis points. This outlook supports a 2.1 percent growth forecast for US real GDP. Meanwhile, the report notes a historic shift in equity projections: for the first time, developed market equities are expected to outperform emerging markets. Fixed income also shows resilience, with global aggregate bond forecasts reaching 5.3 percent—a two-decade high. Despite these gains, the firm warns that demographic constraints and government deficits will likely keep inflation volatile, requiring investors to remain selective as they balance traditional holdings with private market exposure.