Experts Forecast Stock and Bond Returns: 2026 Edition

Wall Street’s message to investors: Calm down.

That’s the notable takeaway from my latest roundup of capital markets assumptions from major investment providers, where they forecast returns for the major asset classes for the next decade or more. Following a year of robust gains from stocks, most firms reduced their long-term return assumptions for the asset class downward. That downtrend is most striking in the realm of international stocks. While the forecasts generally call for higher returns from non-US equities than US over the next decade-plus, firms’ return assumptions are meaningfully lower for both developed and emerging markets than they were before they rallied in 2025.

What’s also striking is how close equity and fixed-income assumptions are. Equity returns are higher than bonds, but only modestly so in many firms’ forecasts. Given bonds’ much lower volatility, that suggests that conservative investors with near-term spending needs aren’t sacrificing a lot by supplanting some of their equities with high-quality fixed-income investments.

How to Use the Forecasts

Although it’s reasonable to be skeptical about predicting the market’s direction, especially over the short term, the fact is that you need to have some type of return expectation in mind when you’re creating a financial plan. If you can’t plug in a long-term return assumption, it’s tough to figure out how much to save and what sort of withdrawal rate to use once you retire. Long-term historical returns are one option. But at certain points in time—like 2000 or perhaps the current moment—they might lead to overly rosy planning assumptions, which in turn might lead you to save too little or overspend in retirement.

To draw some conclusions about what sorts of return assumptions might be reasonable for planning, I have been amalgamating investment firms’ capital markets assumptions each year. Firms use different methodologies to arrive at their capital markets assumptions, but most employ some combination of current dividend yields, valuation, and earnings-growth expectations to guide their equity forecasts. Fixed-income return assumptions are more straightforward given the tight historical correlation between starting yields and returns over the next decade. That explains why you see more uniformity among firms’ fixed-income return expectations, with variations driven largely by time-period differences.

Before you take these or any other return forecasts and run with them, it’s important to bear in mind that these return estimates are more intermediate-term than they are long-term. The firms I’ve included below all prepare capital markets forecasts for the next seven to 10 years, not the next 30. (BlackRock and Vanguard do provide 30-year forecasts as well as 10-year, and Fidelity’s capital markets assumptions apply to a 20-year horizon. But those are outliers in terms of making such far-reaching forecasts available to the public.) As such, these forecasts will have the most relevance for investors whose time horizons are in that ballpark, or for new retirees who face sequence-of-return risk in the next decade.

Vanguard

Highlights: Nominal median US equity market return of 3.5%-5.5% during the next decade; 3.8%-4.8% median expected return for US fixed income (as of Oct. 31, 2025).

Vanguard’s latest US equity market return forecast is up slightly from where it was a year ago. (The firm presents its forecasts in a range.) The new forecast calls for US equity gains of 3.5%-5.5% over the next decade, versus a range of 2.8%-4.8% in late 2024. However, the new return range for US stocks is lower than the range for US bonds. In addition, Vanguard’s non-US equity return forecast (4.9%-6.9%) is meaningfully lower than it was in the fourth quarter of 2024 (6.9-8.9%), no doubt owing to foreign stocks’ big rally in 2025.

Vanguard provides sub-asset-class forecasts, too. In its most recent run, the firm was most pessimistic about US growth equities: It’s expecting 10-year returns in the range of 2.3%-4.3% for US growth, versus 5.8%-7.8% gains for value stocks. The firm also sees strong prospects for small-cap stocks relative to large. The range for the former was 5.1%-7.1% over the next decade, versus 3.4%-5.4% for the latter.

Vanguard’s return expectations for US aggregate bonds are slightly lower than they were a year ago: a range of 3.8%-4.8% today versus 4.3%-5.3% in 2024. The firm is expecting better returns—albeit with higher volatility—from lower-quality bonds: a range of 4.3%-5.3% for US high-yield bonds and 5.1%-6.1% for hedged emerging-market sovereign bonds.

Vanguard also provides 30-year forecasts for the same asset classes—useful for planning purposes, especially for people preparing to withdraw from their portfolios in retirement. The firm has a slightly higher forecast for the major asset classes over that longer time horizon: 4.4%-6.4% for US stocks, 6.2%-8.2% for non-US stocks, and 4.1%-5.1% for US aggregate bonds.

BlackRock

Highlights: 5.2% 10-year expected nominal return for US equities; 4.1% for US aggregate bonds (as of Sept. 30, 2025).

Reflecting stocks’ strong gains in 2025, BlackRock’s equity return expectations dropped a bit relative to the forecast at the end of 2024. The firm’s 10-year US equity return was just over 5% in September 2025, down from 6.2% at the end of 2024. Meanwhile, the firm’s forecasts for non-US equities over the next decade were a bit lower than in the previous year, too: Its 10-year return expectation was 7.1% for non-US stocks in late 2025, versus 8% a year ago.

Fixed-income returns stayed in the same general range: 4.1% for US aggregate bonds, versus 3.7% a year prior. Like Vanguard, the firm expects better returns, albeit with more volatility, from high-yield and hedged emerging-market bonds: 5.7% for the former and 4.7% for the latter.

Fidelity

Fidelity’s capital markets assumptions employ a 20-year horizon (2025-44) and therefore can’t be stacked up neatly against the 10-year returns from other firms in our survey.

The firm is forecasting a 5.8% nominal and a 3.2% real return for US equities over the next 20 years. That’s roughly in line with its forecast in 2024 but just a third of US stocks’ 10% average real return since 2005 and well below US stocks’ 7% real return since 1926. Fidelity cites elevated equity valuations as the main constraint on US equity gains relative to their gains over the past 20 years. The firm expects the 20-year returns on non-US stocks to be a bit higher than US stocks over the next two decades: 6.7% nominal/4.1% real. The firm is most sanguine about the prospects for emerging-market equities: 8.1% nominal/5.5% real.

On the fixed-income side, the firm was forecasting a 5.1% nominal 20-year return (2.5% real) for the Bloomberg US Aggregate Bond Index as of April 2025.

J.P. Morgan

Highlights: 6.7% nominal returns for US large-cap equities over a 10- to 15-year horizon; 4.8% nominal returns for US aggregate bonds (as of Sept. 30, 2025).

J.P. Morgan’s expectations for equities’ returns over the next 10-15 years were roughly in line with the firm’s September 2024 numbers, but they were higher than most of the firms in our survey. The firm’s outlook for non-US equities was a bit lower than it was a year ago: Its 10- to 15-year outlook for developed-market equities was 7.5%, versus 8.1% in late 2024. Its outlook for emerging-markets equities improved a bit, though: 7.8% as of this year’s forecast versus 7.2% in late 2024.

On the fixed-income side, the firm increased return expectations slightly relative to the year-ago period. It’s expecting a 4.8% return from US aggregate bonds, versus 4.6% a year ago. The firm’s 10- to 15-year forecast for high-yield bonds is 6.1%, the same as in 2024, and its forecast for emerging-market sovereign bonds jumped to 6.3% from 5.8% a year ago.

Schwab

Highlights: 5.9% nominal returns for US large caps during the next 10 years; 4.8% nominal returns for US aggregate bonds (as of Oct. 31, 2025).

Schwab modestly lowered its 10-year return expectations for US stocks to 5.9% from 6% a year ago. The firm’s outlook for non-US developed-market large caps was also a touch lower than last year’s forecast: 7% versus 7.1% in 2024.

In line with the outlook from other investment providers, the firm is forecasting a 4.8% gain just a bit below last year’s estimate. (All figures are nominal.)

Research Affiliates (login required)

Highlights: 3.1% nominal returns for US large caps during the next 10 years; 4.7% nominal returns for US aggregate bonds (as of Dec. 31, 2025).

Research Affiliates’ 10-year US market return expectations declined a bit, from a 3.4% nominal return projection for US large caps at the end of 2024 to 3.1% at year-end 2024. Like Vanguard, the firm is expecting US aggregate bonds to outperform stocks over the next decade, and its expected volatility for bonds is also substantially lower. The firm accords a return edge to US small-cap stocks versus large-caps: a 7.1% 10-year annualized return assumption for small caps. Consistent with past forecasts, the firm is expecting better things from non-US stocks: a 7.7% 10-year annualized return for developed-market large-cap stocks outside the US and 7.5% for emerging-market equities.

Grantham Mayo Van Otterloo

Highlights: Negative 6% real returns for US large caps over the next seven years; 1.3% real returns for US bonds (as of November 2025).

As usual, GMO’s return expectations for US equities were the lowest of any firm in our survey. The firm is expecting negative 6% real returns for US large caps over the next seven years, assuming a normal interest rate environment, in line with its real return forecast in late 2024.

Consistent with previous forecasts, the firm’s outlook for non-US stocks is brighter than its expectation for US names: The seven-year real return forecast for international large caps is negative 0.7%; 2.5% for international small caps; 1% for emerging-market equities; and a whopping (for GMO) 3.8% real return for emerging-market value stocks. Those numbers are roughly in line with what they were a year ago.

The firm’s outlook for bonds is also in the same ballpark as its year-earlier numbers: a 1.3% real return for US bonds (down slightly from 1.5% in 2024) and a 1.5% real return forecast from emerging-market bonds.

Morningstar Multi-Asset Research (not public-facing)

Highlights: 5.3% 10-year nominal returns for US stocks; 4.5% 10-year nominal returns for US aggregate bonds (as of Dec. 31, 2025).

MAR’s outlook for non-US stocks, especially emerging markets, is substantially better than its case for US stocks. While the 10-year return expectation for US stocks is just 5.3%, it’s 7.5% for non-US developed-market stocks and 9.9% for emerging-market equities.