Headline: Goldman Sachs Projects Resilient Decade for Global Equities, With Asia and EM Out in Front
Key Takeaways
Global equity valuations may look elevated, but long-term returns still appear durable. A fresh outlook from Goldman Sachs, led by Peter Oppenheimer, points to roughly 7.7% annualized returns in dollar terms over the next decade, driven by earnings growth and consistent shareholder distributions through dividends and buybacks.
The bank’s regional breakdown signals a leadership shift toward Asia and emerging markets. The U.S. is expected to deliver around 6.5% per year, largely from earnings and modest dividends, with buybacks helping offset valuation headwinds. Europe’s forecast sits near 7.1%, split evenly between earnings expansion and payouts. Japan is seen at approximately 8.2%, underpinned by about 6% EPS growth and policy-led improvements to corporate governance and shareholder returns. Asia ex-Japan stands out at roughly 10.3%, supported by close to 9% EPS growth and a 2.7% dividend yield, though partially tempered by multiple compression. Broad emerging markets lead the pack at around 10.9%, backed by robust profit growth in China and India.
Goldman Sachs highlights a case for diversifying beyond the U.S., citing higher nominal GDP growth across emerging economies, the globally distributed long-run benefits of artificial intelligence, and the potential tailwind of a softer U.S. dollar that could amplify non-U.S. equity returns. For investors seeking long-term equity exposure, the balance of earnings power, dividend income, and structural growth trends increasingly favors Asia and emerging markets.
Key Points: – Global equities: ~7.7% annualized USD returns projected over the next decade – U.S. equities: ~6.5% per year, driven by earnings, dividends, and buybacks – Europe: ~7.1% returns, evenly split between earnings growth and payouts – Japan: ~8.2%, supported by ~6% EPS growth and governance-led payout reforms – Asia ex-Japan: ~10.3%, fueled by ~9% EPS growth and a 2.7% dividend yield – Emerging markets: ~10.9%, led by profit growth in China and India, aided by potential USD weakness
