2026 risk and returns assumptions

 

The exhibit shows a scatterplot chart of assumed risk versus return for 2026 across asset classes. Expected returns and standard deviations, respectively, are: Cash (USD) 3.2% and 0.6%; municipal bonds 3.5% and 4.8%; U.S. Treasury short term, 3.7% and 2.2%, U.S. Treasury intermediate term, 4.0% and 5.6%, U.S. Treasury long term, 4.7%, and 11.6%; U.S. TIPS, 3.8% and 5.7%; U.S. aggregate, 4.5% and 4.3%; U.S. corporate, 5.2% and 6.5%, U.S. corporate long duration, 5.6% and 11.3%; U.S. high yield, 5.9% and 8.0%; global aggregate, 4.0% and 6.1%, non U.S. global aggregate, 3.4% and 8.1%; emerging markets debt (USD), 6.6% and 8.9%, emerging markets debt (local), 6.8% and 11.8%; U.S. equity, 6.1% and 15.2%, U.S. small cap equity, 6.7% and 19.6%; developed markets equity, 6.0% and 15.6%; all country world equity, 6.0% and 15.7%, all-country world small cap equity, 6.2% and 18.3%; non U.S. developed markets equity, 5.7% and 16.8%; and emerging markets equity, 6.5% and 20.4%

Fixed

 

income

Equity

Standard deviation

Return

Source: Capital Group. As of December 31, 2025, with valuations as of September 30, 2025. All assumptions are for market asset classes only and are reviewed at least annually. These figures represent the views of a small group of  investment professionals based on their individual research and are approved by the Capital Market Assumptions Oversight Committee. They should not be interpreted as the view of Capital Group as a whole. As Capital Group employs The Capital System™, the views of other individual analysts and portfolio managers may differ from those presented here. They are provided for informational purposes only and are not intended to provide any assurance or promise of actual returns. They reflect long-term projections of asset class returns and are based on the respective benchmark indexes or other proxies and therefore do not include any outperformance gain or loss that may result from active portfolio management. Note that the actual results will be affected by any adjustments to the mix of asset classes. All market forecasts are subject to a wide margin of error.