A weak environment for economic growth and inflation, paired with low bond yields, portend anemic returns from a typical stock-bond portfolio over the next decade, according to Morgan Stanley.

A traditional fund -- split 60% in equities and 40% in fixed income -- will see an annual gain of just 2.8% over that time, about half the average over the last two decades, the firm’s strategists estimate. That’s based on the S&P 500 Index returning 4.9% per annum and 10-year Treasuries handing investors 2.1% a year for a dollar-denominated investor.

Not only will the returns be below what investors are used to but lower sovereign-bond yields will dampen the ability of fixed-income securities to offset large declines in equities, they said.

“The return outlook over the next decade is sobering,” according to strategists including Serena Tang and Andrew Sheets. “Investors face a lower and flatter frontier compared with prior decades, and especially compared to the 10 years post-GFC, when risk-asset prices were sustained by extraordinary monetary policies that are in the process of being unwound.”

The assessment comes with a caveat that low return expectations in the past didn’t materialize as central-bank intervention pushed up asset prices. The analysts see the U.K. having the highest return potential for equities, followed by emerging-market shares.