Canadian equities and U.S. equities are projected to return 6.3% and 6.4%, respectively, down from 6.6% in last year\u2019s guidelines.<\/p>\n
Returns for international developed-market equities and emerging market equities are projected at 6.6% and 7.5%, respectively, down from 6.9% and 8% in last year\u2019s guidelines.<\/p>\n
The guidelines assume an annual inflation rate of 2.1% \u2014 unchanged from the previous guidelines \u2014 and include new guidance on interpreting short-term inflation.<\/p>\n
Return rates of 2.4% and 3.2% are projected for short-term and fixed-income investments, respectively. Compared to the previous guidelines, the projection for short-term investments is unchanged, while that for fixed income is down from 3.4%.<\/p>\n
The borrowing rate remains at 4.4%.<\/p>\n
For the first time, the guidelines include an assumption for shelter projection considerations \u2014 primary residence appreciation and primary residence rents \u2014 supported by data from the Canada Mortgage and Housing Corp. and global research.<\/p>\n
\u201cBecause housing costs \u2014 whether related to home ownership or renting \u2014 represent a significant and persistent component of a household\u2019s financial picture, the committee believed it was important to offer planners clear guidance in this area,\u201d Nick Hearne, chair of the projection assumption guidelines committee, said in the release.<\/p>\n
An expected long-term annual appreciation rate of 1% above the inflation rate is \u201cgenerally reasonable\u201d for both a primary residence and for rent, the guidelines say.<\/p>\n
The guidelines are based on a variety of sources, including the actuarial reports for the Canada Pension Plan and the Quebec Pension Plan, historical data for inflation and benchmark fixed-income and equities indexes, and the Shiller earnings-to-price average for relevant equities market indexes.<\/p>\n","protected":false},"excerpt":{"rendered":"Canadian equities and U.S. equities are projected to return 6.3% and 6.4%, respectively, down from 6.6% in last…\n","protected":false},"author":2,"featured_media":384812,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[138,779,246,3899,45699,178739,3339,111,139,69,244,245,6443],"class_list":{"0":"post-384811","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-equities","10":"tag-finance","11":"tag-financial-planning","12":"tag-fixed-income","13":"tag-fp-canada","14":"tag-housing","15":"tag-new-zealand","16":"tag-newzealand","17":"tag-nz","18":"tag-personal-finance","19":"tag-personalfinance","20":"tag-returns"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/384811","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=384811"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/384811\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/384812"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=384811"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=384811"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=384811"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}