Global equities may look expensive, but Goldman Sachs expects returns to remain resilient over the next decade, driven primarily by earnings growth and steady shareholder payouts. In a new outlook, Peter Oppenheimer, Goldman’s chief global equity strategist, forecasts 7.7% annualised USD returns worldwide, underpinned by nominal GDP growth, profitability and distributions.
Goldman breaks out expected 10-year returns by region, highlighting a clear leadership shift toward Asia and emerging markets.
- The U.S. is projected to deliver +6.5% annually, powered almost entirely by earnings and modest dividends, with buybacks helping offset valuation drag.
- Europe is expected to return +7.1%, split evenly between earnings growth and shareholder payouts.
- Japan is seen outperforming at +8.2%, supported by 6% EPS growth and policy-driven improvements to corporate payouts.
- Asia ex-Japan stands out with +10.3% expected returns, fuelled by strong ~9% EPS growth and a 2.7% dividend yield, though partly tempered by valuation compression.
- Broader emerging markets top the table at +10.9%, led by robust earnings growth in China and India.
Oppenheimer argues investors should diversify beyond the U.S., citing higher nominal GDP growth in emerging markets, the broad and global nature of AI’s long-run benefits, and the potential tailwind of a weaker USD, which would further enhance non-U.S. returns
