How to forecast returns for the next five years

At the end of 2020, Robin Parbrook decided to do some creative thinking. Like many in the industry, it had been a head-spinning year for the Schroders fund manager, who runs the £500mn Asia Total Return (ATR) investment trust and a bigger, $5bn (£4.1bn) Luxembourg-domiciled equivalent. After losing a third of its value by March, the trust’s net asset value finished the year up 33 per cent. It was “pretty much the best” annual performance of his career.

Feeling upbeat, Parbrook and his fellow co-head of Asian equities, Lee King Fuei, proceeded to sketch 15 scenarios for the global economy in 2030. Writing at the end of a year that often seemed to progress at warp speed (and into which many argued a decade of change had been squeezed), the pair weren’t alone in pondering both the immediate and far horizons.

Nevertheless, the pandemic framed a lot of their concerns. The two events that defined 2022 – Russia’s full-scale invasion of Ukraine and ChatGPT’s demonstration of artificial intelligence (AI)’s potential – are conspicuous by their absence on the duo's list, despite having since beaten viruses and vaccines for investors’ attention.