Key takeaways

  • Over the next decade, a more favorable macroeconomic backdrop will support higher expected returns across most investable assets, enhancing the risk-return profile of SAA across investor types, notwithstanding the exclusion of idiosyncratic alpha in our Capital Market Assumptions (CMA) models.

  • Amundi’s 2025 CMA highlights the growing appeal of real and alternative assets, with hedge funds and global private debt standing out in the medium risk spectrum. Global private equity and infrastructure investments can enhance expected returns and offer diversification, but they also carry liquidity and complexity risks that demand specialized expertise.

  • Including alternative investments increases expected returns by 50 to 100 basis points with a medium appetite for illiquidity risk. With a high illiquidity tolerance, moderate risk profiles are little changed, while dynamic risk profiles experience a significant shift, with allocations to real and alternative assets doubling and return expectations rising by 50-60 basis points.

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Tailoring real and alternative assets to illiquidity appetite

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