2024 great expectations: asset class expected returns

Irish Life Investment Managers (ILIM) has recently reviewed its long-term expected returns from the major asset classes. Many of the factors that drove markets last year, such as the impact of generative AI and falling inflation, remain supportive, and there’s also more confidence now over the economic backdrop, with the recessionary fears that existed a year ago having receded. 

Key take-aways include:

• After strong returns for most asset classes in 2023, expected returns remain attractive both in absolute terms and relative to cash.
• Geopolitical risks are likely to persist, given the numerous elections in 2024, but this may yet provide opportunities for those investors who can look through potential short-term volatility.
• Equities remain the most attractive asset class long-term while, within fixed income, yields remain elevated compared to the last decade, pointing to their strong return potential also.
• Expected returns for both Irish and European property have risen, and remain high for Alternatives, pointing to the continued value of having exposure to these asset classes within a diversified portfolio.