5-year Expected Returns: The Great Rewiring

The report draws an analogy with the human brain, which has always been able to adapt to adversity, rewiring itself when necessary. Expected Returns argues that we’re now at a similar point in the global economy, where new pathways will develop to circumvent trading chokepoints such as the closure of the Strait of Hormuz.

It means the global economic architecture is changing as we are moving from a ‘just-in-time’ efficiency that was dominant in the past, to a ‘just-in-case’ resilience. This can be seen in the surge of investments in renewable energy infrastructure as nations seek to improve their energy security, while AI continues to remodel business operations.

The 112-page outlook makes forecasts for the likely returns of all the major asset classes, from equities to bonds. We offer our usual bull, bear and base cases for future economic development, and include four special topics of interest to investors.