2026 Long-term annualized capital market expected returns

Each year, CIBC’s Multi-Asset and Currency Management team develops long-term return and volatility expectations for a broad set of asset classes, in collaboration with our Total Investment Solutions team. These expectations are the cornerstone of our firm’s strategic asset allocation thought leadership and client advisory services.

We have a constructive growth outlook for the next 10 years in aggregate — one in which favourable tailwinds, including investment spending on AI and automation, infrastructure and defense, dominate negative factors that include adverse demographics in many countries.

Resilient nominal economic growth should underpin healthy global earnings growth over the next decade. We also expect margin improvements driven by AI adoption. Elevated valuations, especially in the US, remain a structural headwind to long-term returns. Overall, we expect most markets to deliver mid- to high-single-digit returns in local currency (LC) terms, with Emerging Markets (EMs) offering the most attractive opportunities.

Developed Market (DM) government bonds are expected to deliver 3.0 to 4.5% annualized returns (LC) and to remain key portfolio diversifiers in periods of economic weakness. Canadian corporate bonds are expected to return 4.5% annually, while EM government bonds offer the highest return potential at over 7% per year (LC).