giry2026-summary-public
The UBS Global Investment Returns Yearbook 2026 Public Summary distills more than a century of historical financial data (1900‑2025) across 35 countries and five composite market indices. Compiled by Elroy Dimson, Paul Marsh and Mike Staunton, the report draws on the DMS database to present long‑run real and nominal returns for equities, bonds, bills, currencies and gold, and to analyse the drivers of those returns. Key findings include: (1) a massive transformation of the global economy and equity market concentration, with the United States now holding about 62 % of world equity value; (2) a dramatic shift in industry composition – early‑20th‑century dominance of railroads, textiles and steel gave way to technology and healthcare; (3) equities have vastly outperformed all other asset classes, delivering a 9.8 % nominal annual return (6.6 % real) versus 4.6 % (1.6 % real) for bonds; (4) developed markets have generally outperformed emerging markets over the full sample, though emerging markets showed higher returns in the post‑1960 period; (5) lower inflation and higher economic growth are associated with higher real returns for both equities and bonds; (6) gold’s role as an inflation hedge is limited – real gold returns average only 1.3 % per year and are negative in many high‑inflation years; (7) economic risk has been a more consistent driver of equity returns than geopolitical risk, which only matters during rare extreme events; (8) diversification remains valuable despite rising market concentration and higher correlations, especially when currency risk is hedged; (9) currency hedging reduces portfolio volatility and improves Sharpe ratios for both equities and bonds; (10) style and factor investing, particularly momentum, have delivered persistent premiums, though factor performance varies across decades and countries. The summary also lists the full set of ISO‑coded markets covered, provides author biographies, contact information for UBS and the dataset, and includes standard legal and disclaimer notices.
Topics
Transformations of the Global Economy and Market Structure Since 1900
Analysis of how world GDP shares and equity market concentration have shifted, highlighting the United States' rise to ~62 % of global equity value despite a declining GDP share.
Equities’ Long‑Run Outperformance Over Bonds, Bills and Inflation
Presentation of cumulative nominal and real returns for equities, bonds, bills and inflation from 1900‑2025, illustrating the risk‑return trade‑off and the law of higher returns for higher risk.
Developed vs Emerging Market Returns Across the Century
Comparison of annualized returns for developed and emerging markets, noting classification changes over time and the periods where emerging markets outperformed.
Inflation’s Influence on Real Asset Returns
Empirical relationship between inflation rates, economic growth, and real returns for equities and bonds, showing higher returns in low‑inflation, high‑growth environments.
Gold’s Historical Performance as an Inflation Hedge
Examination of real gold price trends, average annualized real return (1.3 % p.a.), and the weak correlation with inflation, including periods of negative returns during high inflation.
Economic vs Geopolitical Risk: Relative Impact on Equity Returns
Regression analysis indicating that economic risk drives long‑run equity performance, while geopolitical risk only matters during rare extreme events such as world wars and oil shocks.
Diversification Challenges and the Continued Value of Global Allocation
Discussion of rising market concentration and correlations, yet evidence that global diversification (especially with currency hedging) still improves risk‑adjusted returns.
Currency Hedging Benefits for Equity and Bond Portfolios
Quantification of the volatility reduction and Sharpe‑ratio improvement from hedging foreign‑exchange exposure for both equity and bond investors.