"Payback time" for borrowed returns has begun, warns Antti Ilmanen

At the start of 2022, expected returns on a 60/40 portfolio were historically low -- and if you think that the recent turmoil has improved this outlook significantly, think again. According to AQR Principal and award-winning finance writer Antti Ilmanen, Nordic investors could be in for an unpleasant surprise.

Antti Ilmanen was a key note speaker at the Nordic Investment Conference in Oslo earlier this month. AMWatch met him after his presentation. | Photo: Søren Rathlou Top / AMWatch

After decades of windfall gains from lowering yields and richer asset valuations, Co-Head of Global Portfolio Solutions Group at AQR Capital Management Antti Ilmanen has a warning for investors:

“40 years ago, everything looked cheap, which implied high expected returns. Now it’s the opposite. We’re looking at low prospective returns. We have been borrowing returns from the future. The enrichment of bonds has made all other asset class expensive,” Ilmanen says in an interview with AMWatch at the Nordic CFA Investment Conference in Oslo earlier this month.

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