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What return can you expect from Australian equities?

What return can you expect from Australian equities?

Equities, while volatile, have historically provided attractive returns to long-term investors. The ASX All Ordinaries Index, for example, has delivered a compound total return (capital growth plus dividends) in the region of 12 per cent p.a. since 1900.

It is worth noting here that we are probably more interested in the “real” return (or return after inflation) and should be wary of comparing high-inflation periods with low-inflation periods. If we look at the last three decades (sidestepping the high-inflation period of the 1980s) the total return has been around 10 per cent p.a., and more recently the return has been a little lower still (although shorter timeframes are naturally more variable). The full history of ASX All Ordinaries returns is set out below.


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Tim joined Montgomery in July 2012 and is a senior member of the investment team. Prior to this, Tim was an Executive Director in the corporate advisory division of Gresham Partners, where he worked for 17 years. Tim focuses on quant investing and market-neutral strategies.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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