2020 JP Morgan Capital Market Assumptions

Below is the updated 2020 JP Morgan CMAs

    Capital Market Assumptions Summary

    Asset Class Avg Return Volatility 
    Cash 1.90% 0.45%
    Government Bonds
    2.70% 3.44%
    2.70% 5.38%
    US Fixed Income
    3.10% 3.41%
    Short Duration Bonds
    2.80% 1.93%
    US Corporate Bonds
    3.40% 5.96%
    High Yield Bonds
    5.20% 8.22%
    Intl Fixed Income
    1.79% 2.91%
    Emerging Markets Sovereign Debt
    5.10% 8.36%
    US Muni 1-15 Yr Blend
    2.50% 3.14%
    US Large Cap
    5.60% 14.34%
    US Mid Cap
    5.89% 16.29%
    US Small Cap
    6.50% 18.94%
    EAFE Equities
    6.70% 13.58%
    Emerging Mrkt Equities
    9.20% 21.11%
    Intl Equities
    6.50% 15.45%
    Private Equity
    8.79% 20.16%
    Alternatives / REIT
    6.00% 15.42%
    Global Infrastructure
    6.00% 10.46%
    Diversified Hedge Funds
    4.50% 7.36%
    Long Bias Hedge
    4.80% 11.04%
    2.50% 16.12%


    • Advizr’s market data assumptions are based on JP Morgan Asset Management’s Long-term Capital Market Return Assumptions report. Specifically, we use the report’s expected compound returns, standard deviations and correlation matrix on each underlying asset class as input to our Monte Carlo simulation engine. 
    • Monte Carlo reflects the likelihood of the success of the retirement goal only, but the retirement goal is directly impacted by the use of resources in meeting every other goal proposal in the plan, so it can be viewed as a proxy for the overall plan success.
    • You can model portfolio returns in a client's plan using two different methodologies:

    Weighted Average

    • Uses the JP Morgan capital market assumptions mentioned above on each asset class (as listed in the table below) to come up with a weighted average expected return for the overall portfolio. When this method is selected, all reports and graphs including the Monte Carlo graph are run based on this weighted average return.

    Hypothetical Straight Line

    • Expected returns on portfolios are based on simple straight line returns as indicated by the user in the Asset Allocation popup menu for each investment portfolio. When this method is selected, these customized returns are used for every report in the financial plan EXCEPT for the Monte Carlo graph, which will revert back to using the Weighted Average returns along with standard deviation and correlation on each asset class, in order to generate the various scenarios.