Capital market assumptions (CMAs) are all the things we consider when we’re trying to understand how investments from a certain economy might behave. That includes the economy’s rate of inflation, expected returns and risk characteristics for different asset classes (like stocks and bonds), and information about interest rates.
We use CMAs developed by Morningstar Investment Management, a global investment research firm. At any given time, our CMAs are based on current interest rate conditions. So, if interest rates are low, our forecasts will reflect scenarios that also start in a low interest rate environment. We review our CMAs annually, and we update them as markets change.