2022 Asset Allocation Report
Also Interesting
Including: Long-Term Capital Market Assumptions Short-Term Tactical Outlook
This report presents Cliffwater recommendations for asset class return and risk (standard deviation) assumptions, intended for asset allocation studies that set long-term portfolio asset class targets. While these forward-looking or “expected” asset return and risk assumptions are intended for investment horizons of 10 years or longer, they can change as market conditions change and therefore should be used for asset allocation work conducted near the date of the report.1
Exhibit 1 on the following page provides Cliffwater return forecasts for the major asset classes as of January 1, 2022 (column 1) and compares them with our year earlier forecasts at January 1, 2021 (column 2). Also included are the calendar 2021 returns (column 4) for the asset class benchmarks (column 5), which were selected by Cliffwater as representative of each asset class. Decreases (increases) in expected returns are often, but not always, driven by prior performance gains (losses). A full listing of asset class return, risk, and correlation forecasts is provided at the end of this report.
Key observations from our 2022 Asset Allocation Report are:
