In our work with investors, we often observe that they use unrealistic assumptions for the expected returns of different asset classes.  This can have negative repercussions on the adequacy of their strategic asset allocation, on their manager selection, budgeting and liquidity management processes.  We sometimes encounter investors assuming returns of 8% for public equity and 25% for private equity without specifying the reference currency and the economic scenario (including average inflation and interest rate assumptions) for which they apply.

onValues assists investors in deriving realistic return assumptions for asset- and sub-asset-classes based on our extensive return database that is annually updated based on the indications of a wide range of buy-side, sell-side and independent research institutions.  We typically advise not to change return assumptions too frequently and to focus on long-term averages.  In the event of major financial market corrections and changes in macro-economic parameters, though, return expectations will change and we will support clients in taking this into account in their financial planning.