Secular Outlook for Global Growth: 2015–34

Fidelity’s Asset Allocation Research Team employs a multi-time-horizon asset allocation approach that analyzes trends among three temporal segments: tactical (short term), business cycle (medium term), and secular (long term). This report focuses exclusively on secular trends that may influence the long-term outlook for various asset classes. Key takeaways are the following:• Slower growth is expected to result in a historically lower interest-rate climate and less of a tailwind to equities. • With the economy providing the backdrop for asset markets, our secular GDP growth forecasts are the foundation for developing long-term capital market assumptions. • Our forward-looking, global approach emphasizes the key components of GDP growth—population and productivity—and calculates the critical drivers that have been most predictive. • Over the next 20 years, global growth is expected to be somewhat slower, due primarily to deteriorating demographics in most countries, particularly aging populations in advanced economies. • Emerging Asia is expected to grow more slowly, due in part to less catch-up potential after a period of rapid growth, though developing economies in general should continue to experience faster relative growth. • Slower world growth will lead to lower-than-historical-average interest rates and provide less of a boost to equity returns, but global opportunities for investment are still expected to expand.