Last year's weak growth is likely to continue throughout 2016, with major economies unlikely to see much improvement in performance, according to State Street Global Advisors (SSGA).
The group's chief economist, Chris Probyn, said during a Sydney event that conditions are not expected to improve much over the next 12 months as the major advanced economies suffer from a loss of momentum.
"My theme for 2016 is more of the same: lacklustre growth, low inflation and very limited policy tightening," he said.
Mr Probyn said while the domestically-focused sectors are limiting any downside, the weakness of manufacturing in the major economies seems to be limiting any upside in returns.
"Moreover we continue to see the risks skewed to the downside, likely fuelling bouts of investor uncertainty and market volatility," he said.
In its 2016 Global Market Outlook, SSGA said it believes European and Japanese equities are, however, showing some life.
"Pan-European trade is picking up and German business sentiment surveys point to solid cyclical growth," said the report.
"Europe is a large net importer of commodities, and therefore lower input costs will improve European corporate profits."
However, it still has a lower forecast for returns due to the previous relative outperformance of Europe compared to its peers, and the fact the UK has a higher exposure to energy stock.
"In Japan, the Abenomics fiscal and reform program appears to finally be generating a pickup in growth and inflation," SSGA said.
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