Where do the security forecasts come from? Why is the expected return different from historical returns?
The short answer is that the past is not a guarantee of future returns.
The more complex answer is that there are many different factors at play. Some securities have very short histories (e.g. recent fund launches or recent IPOs), or securities were launched in extremely convenient timelines (e.g. a fund launched in 2009 at a low point as part of the Great Financial Crisis). The macro environment (e.g. liquidity, interest rates, inflation, etc) is also very different today then it was even 5 years ago.
The PortfolioPilot security forecasts are forward-looking, using hedge fund inspired techniques, an ensemble of 4 different types of models (CAPM, DFM, multi-variate ML, and univariate time-based). A core input is historical performance since inception and recent performance, plus additional macro factors like inflation rates and credit conditions, sentiment and news, related securities or funds, geopolitical risk, and finally standard factors like beta & volatility.
Read more about the forecasts here: https://globalpredictions.com/technology/forecasting
