Stock market returns in the first quarter of the 21st century have been lower than over the 20th century, though global equity investors over the past 25 years still saw annualised real returns of 3.5% and an equity risk premium relative to bills of 4.3%, says an annual historical markets report co-authored by Elroy Dimson of Cambridge Judge Business School.
For the full 125-year history of the Global Investment Returns Yearbook 2025, published by investment bank UBS, the annualised real returns were 5.2% for worldwide equities versus 1.7% on bonds, and 0.5% on bills.
The Yearbook examines returns from different types of investments in 35 markets from 1900 through 2024.
The report, says Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, “can help us see the long-term effects of following the principles of diversification, asset allocation, and risk and reward. It once again teaches that a long-term perspective matters, and not to underestimate the value of a disciplined investment approach.”
Research shows a striking outperformance of stocks over long bonds and Treasury bills
Over the report’s full 125-year period, “the outperformance of stocks has been striking”, says a summary of the report. “Equity returns are volatile, so it takes very long histories to obtain a realistic understanding of what long-run returns can tell us about the future.
“Equities performed best. An initial investment of USD 1 in US equities grew to USD 107,409 in nominal terms by end-2024. Long bonds and Treasury bills gave lower returns, although they beat inflation. Their respective index levels at the end of 2024 are USD 268 and USD 67, with the inflation index ending at USD 37.”
The report is authored by Elroy Dimson, Professor of Finance and Chairman of the Centre for Endowment Asset Management at Cambridge Judge, Paul Marsh, Emeritus Professor of Finance at London Business School, and Dr Mike Staunton, Director of the London Share Price Database at London Business School.
Featured faculty
Elroy Dimson
Professor of Finance
Chairman of the Centre for Endowment Asset Management (CEAM)
Featured research
Dimson, E., Marsh, P. and Staunton, M. (2025) Global investment returns yearbook 2025. Zürich: UBS
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