Emerging Market Equities Outperform US and Europe, Offering Highest Returns

Discover why investing in emerging market equities can yield higher returns than traditional markets like US and Europe. Stay ahead of the game.

The latest "Long View 2024" report from the DWS Research Institute has revealed some interesting insights into the long-term forecasts for major asset classes in 2024. According to the report, return forecasts for equities have seen a significant increase compared to last year's projections. While Europe and emerging markets are now on par with or slightly above the realized returns of the past decade, US equities are still lagging behind.

In terms of regional equity markets, emerging markets are expected to offer the highest forecasted returns, albeit only slightly ahead of certain European markets and the US. The report also highlights positive changes in fixed income return forecasts, with both core fixed income and credit showing higher nominal return outlooks due to current high starting yield levels.

Credit asset classes, including investment grade and high yield corporates, as well as sovereign and corporate emerging market debt, are all expected to outperform returns from the previous decade. Notably, emerging market US dollar sovereign and corporate debt stand out as having the highest return forecasts among credit asset classes.

Alternative asset class return forecasts are in line with or slightly below traditional asset class forecasts, with infrastructure equity offering the highest return outlook. However, private real estate equity forecasts have declined, attributed to a methodology change and less attractive valuations relative to TIPS yields.

Commodity future return forecasts have shown improvement compared to the poor returns of the previous decade, potentially offering diversification benefits and inflation protection. Overall, the report paints a positive picture for the investment landscape in 2024, with various asset classes showing promising return prospects.

The "Long View 2024" report by the DWS Research Institute provides valuable insights for investors looking to navigate the financial markets in the coming years. With increased return forecasts across equities and fixed income, as well as potential opportunities in alternative asset classes, investors may find new avenues for growth and diversification in their portfolios.