• J.P. Morgan Asset Management projects a 7.0% annual return for a traditional 60/40 stock-bond portfolio over the next 10–15 years, up from 6.4% in its previous outlook.
  • The firm expects U.S. stocks to return 7.5% annually and global bonds 5.3%, with private equity at 9.8% and gold at 5.5%.
  • Adding diversified alternatives could lift portfolio returns to 7.5% annually and improve the Sharpe ratio by 21%.

A More Optimistic Long-Term View

J.P. Morgan Asset Management’s latest long-term capital market assumptions paint a brighter picture for balanced portfolios, forecasting a 7.0% compound annual return in U.S. dollars for a global 60/40 stock–bond portfolio over the next 10–15 years. That’s up from 6.4% in the prior edition, according to the firm’s 2027 Long-Term Capital Market Assumptions report, its 31st annual edition, which uses estimates as of September 30, 2026.

The improved outlook stems from three connected forces: an anticipated $15 trillion global investment boom centered on artificial intelligence and related infrastructure, higher starting bond yields that enhance fixed-income income, and shifting capital flows toward domestic infrastructure, energy security, and technological capacity. “The normalization of yields since 2022 has fundamentally improved the return prospects for bonds,” the report notes, adding that productivity gains from AI adoption could support corporate profits and lift long-run U.S. real GDP growth to 2.1%.

Asset Class Forecasts

The 60/40 benchmark is defined as 60% global equities, represented by MSCI (MSCI) ACWI, and 40% Bloomberg U.S. Aggregate bonds. Within that, U.S. large-cap equities are expected to return 7.5% annually, an increase of 0.8 percentage points from the previous edition. Global aggregate bonds are forecast to return 5.3%, which the firm describes as its highest forecast in two decades.

Private equity is projected to return 9.8%, though the report separately forecasts 9.6% for large-cap private equity median managers. Gold carries a 5.5% forecast, unchanged from the prior year. A portfolio with a 30% allocation to diversified alternatives—including private equity, real estate, real assets, private credit, and hedge funds—could see returns rise to 7.5% annually, alongside a 21% improvement in the Sharpe ratio, a measure of risk-adjusted return.

Near-Term Challenges Persist

The optimistic long-term outlook comes despite recent near-term headwinds at the parent company. JPMorgan Chase (JPM) reported third-quarter net income of $15.3 billion, up 6% year over year, with diluted earnings of $5.57 per share. Revenue rose 8% to $50.2 billion, while assets under management climbed 13% to $5.2 trillion. However, earnings missed analysts’ expectations due to securities losses and weaker fixed-income trading—a reminder that even the most bullish long-term forecasts can coexist with short-term business disappointments.

The report also acknowledges risks to its thesis, including the possibility that AI investment fails to deliver durable productivity gains, persistent inflation shocks that could weaken the diversification benefit of 60/40 portfolios, and policy risks such as tariffs or restrictions on cross-border capital flows. The firm explicitly cautions that its assumptions are for strategic allocation, not tactical trading decisions.

A Shifting Landscape

Notably, for the first time in the publication’s history, developed-market equity forecasts exceed those for emerging markets, partly due to unusually high cyclical technology margins in Korea and Taiwan that are expected to normalize. J.P. Morgan also introduced a long-term bitcoin return framework, though unstable correlations and volatility prevent its full inclusion in the main portfolio-modeling matrices.

The takeaway for investors is not that 7% returns are assured, but that the long-run opportunity set appears stronger than a year ago—accompanied by enough uncertainty to warrant broader diversification rather than concentrated bets on any single asset class.

Correction: An earlier version of this article misstated the forecast for private equity. It has been corrected to 9.8%.