Voya Investment Management releases new annual long-term assumptions for the capital markets
December 13 2023 - 9:03AM
Business Wire
Voya Investment Management (Voya IM), the asset management
business of Voya Financial, Inc. (NYSE: VOYA), today issued its
annual Capital Markets Assumptions report for 2024. The report
provides market forecasts for the coming decade while considering
longer-term trends in economic and financial factors that are
likely to drive asset class return and risk. Among the key insights
are:
- The next decade will likely be characterized by returns below
historical averages across all major asset classes.
- Voya IM’s base case forecasts 1.6% U.S. GDP growth through
2033, driven by below trend productivity growth and subdued labor
force growth.
- Developed market equities are likely to deliver mid-single
digit returns, with U.S. markets higher than most comparable
non-U.S. ones.
- Bond return assumptions have increased from last year and are
at the highest in a decade, showing material value in fixed income
— this includes high yield, which is anticipated to be competitive
with equities in terms of investment returns.
- Investment return forecasts are generally above inflation. If
expectations prove broadly correct, asset allocators will find
numerous opportunities to generate alpha across and within asset
classes.
- While the U.S. will be constrained by labor force growth, it
can move to a somewhat higher sustained growth path than it
experienced in the previous business cycle. The key is to exit the
current low productivity regime that has constrained the U.S.
economy.
“This exercise is an opportunity for us to step back from the
day-to-day noise within the markets and consider longer-term trends
in economic and financial factors,” said Barbara Reinhard, chief
investment officer, MASS. “Given higher valuations and lower risk
premiums in equity markets, our analysis for the next decade paints
a picture of relatively low expected returns for equities. In
contrast, our outlook for bonds has improved, owing to higher
starting bond yields compared with the depressed levels of
2022.”
The analysis, conducted by Voya IM’s Multi-Asset Strategies and
Solutions (MASS) team, looked at numerous macroeconomic and
financial data as part of its review and forecasts, including the
impact of labor force participation rate expectations on potential
gross domestic product (GDP), the likelihood that profit margins
will mean-revert, and the outlook for long-run trends in
productivity.
Voya IM’s forecasts were informed by historically low potential
GDP growth, reduced labor supply and elevated inflation.
Furthermore, in response to client demand and following guidance
from organizations such as the Task Force on Climate-Related
Financial Disclosures (TCFD), climate scenarios were integrated
into Voya IM’s economic forecasts this year.
About Voya Investment Management
Voya Investment Management manages approximately $312 billion as
of September 30, 2023 in assets across public and private fixed
income, equities, multi-asset solutions and alternative strategies
for institutions, financial intermediaries and individual
investors, Voya is one of the 50 largest asset managers globally,
and draws upon a 50-year legacy of active investing and the
expertise of 300+ investment professionals. Voya IM has cultivated
a culture grounded in a commitment to understanding and
anticipating clients’ needs, producing strong investment
performance, and embedding diversity, equity and inclusion in its
business.
VOYA-IM
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231213043536/en/
Media: Kristopher Kagel Voya Financial (201) 221-6534
Kristopher.kagel@voya.com
Voya Financial (NYSE:VOYA)
Historical Stock Chart
From Sep 2024 to Oct 2024
Voya Financial (NYSE:VOYA)
Historical Stock Chart
From Oct 2023 to Oct 2024