The Vanguard Group projects U.S. stocks will grow by 4.1% to 6.1% annualized over the next 10 years, with value stocks outpacing domestic equities overall, the mutual fund giant said Thursday.
The company, releasing its market and economic forecasts based on June 30 data, also sees a 25% likelihood of a U.S. recession in the next 12 months and a 65% probability in the next 24 months.
Among U.S. stock classes, Vanguard forecasts:
- 4.4% to 6.4% annualized nominal returns for value equites over the next decade.
- 1.6% to 3.6% returns for growth stocks.
- 4% to 6% for large-cap equities.
- 4.3% to 6.3% for small-cap equities.
- 3.9% to 5.9% for real estate investment trusts.
The firm also projects 3.1% to 4.1% annualized returns in U.S. bonds in aggregate, with high-yield corporate bonds the expected growth leaders at a projected 5.7% to 6.7%.
The projections depend on market conditions and thus could change over time, the firm noted.
As for the economy, Vanguard downgraded its U.S. growth forecast for 2022 after a second consecutive quarter of contraction.
