Asset Class - Returns across Eras: Why Timeframe Matters

When investors talk about “the best performing asset class”, the answer almost always depends on when you start measuring.

The chart below highlights average annual returns and volatility across major asset classes over three different periods: since 1990, since 2010, and since 2020. What it shows very clearly is that leadership rotates — sometimes dramatically — and recent performance can be a poor guide to long-term outcomes.

The long view: since 1990

Looking back over the past 35 years, global equities have delivered strong long-term returns, averaging just over 8% per annum, but with meaningful volatility along the way. Private markets have produced even higher headline returns, though at the cost of significantly higher volatility and lower liquidity.

Bonds, both sovereign and corporate, have played a quieter role — offering lower returns, but also materially lower volatility. This highlights their historic role as portfolio stabilisers rather than return drivers.

Gold and real estate sit somewhere in the middle: capable of delivering respectable long-term returns, but with very different risk characteristics and behaviour across market cycles.

A different story since 2010

Shorten the lens to the post-financial-crisis era and the picture changes.

Global equities dominate, delivering double-digit annualised returns, while bonds have struggled in a world of low interest rates and, more recently, rising inflation. Gold has benefited from economic uncertainty, while private markets continue to show strong long-term return potential — again with higher volatility.

This period reinforces an important point: the “lost decade” narrative for certain asset classes is often highly dependent on the chosen start date.

The most recent cycle: since 2020

The past five years underline this even further.

Equities have performed strongly but with elevated volatility. Bonds — traditionally seen as defensive — have delivered weak or even negative returns over this short window as interest rates rose sharply. Gold has been one of the standout performers, reflecting inflation concerns, geopolitical risk, and currency debasement fears.

Private markets, while still delivering positive returns, show very high volatility, reminding investors that these assets are not immune to economic shocks — even if those movements are less visible day-to-day.

The key takeaway for investors

No single asset class “wins” all the time.

Performance leadership rotates, often unpredictably, and assets that disappoint in one period can outperform in the next. This is why diversification, discipline, and alignment with long-term objectives matter far more than chasing recent returns.

For investors, the real risk is not short-term volatility — it’s building portfolios based on what has just worked, rather than what is appropriate for their time horizon, capacity for risk, and financial goals.