Portfolio

Special Report

We estimate that a US 60/40 portfolio will return 6.9% over the next 10-to-15 years. In this update, we include hedging costs projections and revamp our scenario analysis to incorporate hypothetical outcomes to the AI capex cycle.

Our new Private Credit taxonomy adds granularity to the opaque lending universe and introduces Asset-Based Lending—attractive entry points, elevated risks. Private Real Estate delivers the largest upgrades from 2025, while Public REITs and Public Infrastructure present compelling opportunities that investors should not overlook.

Special Report

We revamp several of our methodologies in this edition of our return assumptions. We estimate that a US 60/40 portfolio will return 6.1% over the next 10 years. This is slightly below the return assumptions for US pension funds. Investors can obtain better returns by diversifying internationally and to alternative assets.

Asset class expectations show mixed shifts from 2024, with Real Estate seeing substantial upgrades and Private Equity benefiting from Venture Capital improvements. Private Credit return expectations decline from 2024 but remain relatively attractive. Infrastructure shows varied dynamics across sub-strategies, with Value-Add offering strong return potential. Within Hedge Funds, Long-Short Equity shows higher tactical returns while Multi-Strategy leads strategic projections.

Investors should be tactically tilting allocations towards Direct Lending, Distressed Debt, and Directional Hedge Fund strategies at the expense of Real Estate, Private Equity, and Diversifier Hedge Funds. Structural opportunities are emerging in Real Estate and Venture Capital.