{"id":226673,"date":"2025-01-22T08:38:30","date_gmt":"2025-01-22T08:38:30","guid":{"rendered":"https:\/\/www.quoniam.com\/?p=226673"},"modified":"2025-03-17T13:10:13","modified_gmt":"2025-03-17T13:10:13","slug":"equities-magnificent-growth","status":"publish","type":"post","link":"https:\/\/www.quoniam.com\/en\/article\/equities-magnificent-growth\/","title":{"rendered":"Market commentary equities: 2024 \u2013 another year of magnificent growth"},"content":{"rendered":"\n
\n

The year 2024 was marked by remarkable resilience and growth in global markets. Developed markets shone brightly, with a strong Q4 performance, while Europe and emerging markets showed some signs of weakness. Despite this, risk assets performed well, driven by the continued strength of the US economy.<\/p>\n\n\n\n

Global growth stocks dominated, thanks to the impressive performance of US mega-cap technology stocks. Financials also performed well, rising more than 10 % as the prospects for deregulation improved. Commodities, however, were held back by weak demand in China.<\/p>\n<\/div><\/div>\n\n\n\n

Figure 1: Equity market returns across regions<\/h5>\n\n\n\n
\"\"
Period: 29.12.2023 – 31.12.2024; Source: Datastream<\/figcaption><\/figure>\n\n\n\n
\n

Central banks in developed markets began to normalise policy, but resilient growth and sticky inflation led to a slower pace of rate cuts.<\/p>\n\n\n\n

Developed market equities delivered strong double-digit returns, with the US economy decoupling from other major regions. The Magnificent 7 (+1) 8, a group of leading tech companies, again led the way in 2024. The +1 stems from the tremendous rise of Broadcom in 2024. Showing exponential stock price appreciation as well as stellar earnings forecasts, the chipmaker resembles the early rise of Nvidia. The weight of Broadcom in the MSCI World index almost doubled within the last year, rising from 0.8 % towards 1.5 %, emphasising the tremendous opportunities of the AI business. Nvidia was once again leader of the pack performance wise with Nvidia returning +189 %. The chart below shows the stellar performance pattern of the Magnificent 7 (+1) group and their influence on the concentration of major stock indices over the long term.<\/p>\n<\/div><\/div>\n\n\n\n

Figure 2: Magnificent 7 (+1) and index concentration<\/h5>\n\n\n\n
\"\"
Source: Bloomberg, MSCI, Quoniam Asset Management<\/figcaption><\/figure>\n\n\n\n
\n

European equities lagged their US and emerging market counterparts, returning 8.6 % due to economic weakness and limited exposure to artificial intelligence. Asian markets, including China, faced challenges but rebounded in the second half of the year. The chart below shows the tremendous performance pattern of the Magnificent 7+1 group and their influence on the concentration of major stock indices over the past years.<\/p>\n<\/div><\/div>\n\n\n\n

Figure 3: Style returns across regions<\/h5>\n\n\n\n
\"\"
Period covered: 29.12.2023-30.12.2024; Source: Datastream<\/figcaption><\/figure>\n\n\n\n
\n
Sector & styles: A year of opportunities<\/h5>\n\n\n\n

In 2024, diversified multi-factor strategies in developed markets were challenged by the poor performance of small caps and value. However, quality remained stable and growth\/momentum strategies outperformed, driven by the strong performance of the Magnificent 7+1. In Europe, the environment was more favourable for multi-factor strategies as the value component added to returns and underperformance was much more limited than in the US. Defensive strategies also performed well in Europe, with the MSCI MinVol Index outperforming the broader market by 3 %.<\/p>\n\n\n\n

Emerging markets were a mixed bag of style returns, with value and small caps also being shunned, but with a positive contribution from growth\/momentum. Overall, growth and momentum strategies performed well across all regions, while small-cap, value and defensive strategies struggled to keep pace with the markets.<\/p>\n<\/div><\/div>\n\n\n\n

Figure 4: Valuation metrics across regions<\/h5>\n\n\n\n
\"\"
As of 01\/2025; Source: Datastream, IBES<\/figcaption><\/figure>\n\n\n\n
\n

In 2024, the US stock market has experienced a significant increase in valuation, with prices reaching unprecedented levels. Indeed, US equities are now more expensive than at any time in history, with the exception of the TMT bubble in the early 2000s. They are also more expensive than their global peers, particularly in Europe and emerging markets. They are also more expensive than their mid- and small-cap counterparts. The fixed income alternative is also becoming more attractive, with 10-year Treasury yields approaching 5 % and investment-grade bond yields exceeding US equity earnings yields. This phenomenon is rare and has not been seen for around 20 years. It is important for investors to consider these developments carefully and assess the potential impact on their portfolios.<\/p>\n<\/div><\/div>\n\n\n\n

Figure 5: Yield comparison across asset classes for the US<\/h5>\n\n\n\n
\"\"
As of 01\/2025; Source: Datastream, Bloomberg, IBES<\/figcaption><\/figure>\n\n\n\n
\n
Conclusion<\/h5>\n\n\n\n

Overall, 2024 was another remarkable year for risk assets, driven by the continued strength of the US equities, in particular technology stocks and the resilience of global markets. The return for the asset class in 2025 will depend on the continued strength of the US economy and\/or the recovery of other regions. Central bank policy will also remain key as markets have already priced in optimism for further rate cuts.<\/p>\n\n\n\n

Looking ahead to 2025, we expect the global economy to continue its growth trajectory, driven by the robustness of the US economy and the resilience of European and emerging markets. While there may be challenges ahead, including potential headwinds from policy agendas and ongoing geopolitical tensions, we remain optimistic about the future and look forward to the opportunities in 2025.<\/p>\n<\/div><\/div>\n\n\n\n

<\/div>\n\n\n\n
YOU MIGHT ALSO BE INTERESTED IN<\/h6>\n\n\n\n
\n\n\n
\n
\n \n
\n \n
\n \n
\n
\n \n <\/div>\n
\n
\n
\n Article\n <\/div>\n
\n November 2025\n <\/div>\n <\/div>\n
Quoniam’s equity strategies for Europe and emerging markets have been awarded as \u2018Best Fund Managers\u2019 by the Handelsblatt Research Institute<\/div>\n
\n

Quoniam’s strategy European Equities , managed by Dr Lisa Herr, CFA, has been awarded as best fund manager by Handelsblatt Research Institute for the third year in a row. Additionally, Quoniam\u2019s strategy Emerging Markets Equities MinRisk, managed by Mark Frielinghaus, CFA , has been awarded as best fund manager for the second time in a row in the category \u2018Emerging Markets Equities\u2019.<\/p>\n\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n \n

\n \n
\n \n
\n
\n \n <\/div>\n
\n
\n
\n Article\n <\/div>\n
\n November 2024\n <\/div>\n <\/div>\n
Factor investing in emerging markets: Performance ahead of the pack<\/div>\n
\n

Factor investing in equities has proven effective by systematically identifying and targeting return drivers that are different from the broader market. But, how do regions vary? In this article, portfolio manager Johannes Lins, CFA, explores the differences in factor performance between three common investment regions and looks at why emerging market factor portfolios pull ahead of the pack.<\/p>\n\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n \n

\n \n
\n \n
\n
\n \n <\/div>\n
\n
\n
\n Article\n <\/div>\n
\n November 2024\n <\/div>\n <\/div>\n
Equity commentary: Reactions to the \u201cred sweep\u201d \u2013 sectors and styles in focus<\/div>\n
\n

Following the announcement of the president-elect, equity markets responded with a historic rally – the largest one-day post-election move on record – signalling investor optimism and a recalibration of expectations for the future. In this equity commentary, portfolio manager Rocio Muniz discusses the initial market reactions and the outlook for sectors and styles in the context of new policies.<\/p>\n\n <\/div>\n <\/div>\n <\/div>\n <\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

The year 2024 was marked by remarkable resilience and growth in global markets. Developed markets shone brightly, with a strong Q4 performance, while Europe and emerging markets showed some signs of weakness. Despite this, risk assets performed well, driven by the continued strength of the US economy. Global growth stocks dominated, thanks to the impressive […]<\/p>\n","protected":false},"author":20,"featured_media":226663,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_robots_primary_cat":"none","_seopress_titles_title":"2024 \u2013 Another year of magnificent growth for equities","_seopress_titles_desc":"In our market commentary, Mark Frielinghaus, CFA, looks back on an extremely resilient and growth-fueled year for global equities and highlights the market environment for 2025.","_seopress_robots_index":"","footnotes":""},"categories":[44,115],"tags":[91,41,107],"class_list":["post-226673","post","type-post","status-publish","format-standard","has-post-thumbnail","category-article","category-artikel-en","tag-capital-markets","tag-equities","tag-kapitalmarkt-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.quoniam.com\/en\/wp-json\/wp\/v2\/posts\/226673","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.quoniam.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.quoniam.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.quoniam.com\/en\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/www.quoniam.com\/en\/wp-json\/wp\/v2\/comments?post=226673"}],"version-history":[{"count":10,"href":"https:\/\/www.quoniam.com\/en\/wp-json\/wp\/v2\/posts\/226673\/revisions"}],"predecessor-version":[{"id":241546,"href":"https:\/\/www.quoniam.com\/en\/wp-json\/wp\/v2\/posts\/226673\/revisions\/241546"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.quoniam.com\/en\/wp-json\/wp\/v2\/media\/226663"}],"wp:attachment":[{"href":"https:\/\/www.quoniam.com\/en\/wp-json\/wp\/v2\/media?parent=226673"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.quoniam.com\/en\/wp-json\/wp\/v2\/categories?post=226673"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.quoniam.com\/en\/wp-json\/wp\/v2\/tags?post=226673"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}