Economics
Vanguard Warns of Decade of Muted Returns Despite Strong Growth
- Money manager says world economy did surprisingly well in 2017
- But it still predicts lower returns from equities, bonds
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The world’s biggest mutual fund company says it’s surprised by the global economy’s strength this year, but that doesn’t mean it’s more optimistic about the investment outlook.
Investors should brace for a decade of “muted returns,” said Nathan Zahm of Vanguard Group, reiterating the $4.5 trillion money manager’s view that equity returns will drop to 5 to 8 percent per year, while those for bonds will decline to 2 to 3 percent. That’s even as the world economy posts better-than-expected performance in 2017, helped by growth in Japan and Europe, the Hong Kong-based senior investment strategist said.