Teachers with-profits policies investment information

2024 continued where 2023 left off with most asset classes ending the year in positive territory. Global equities performed strongly, and only UK Gilts detracted in the Fixed Income space. Global Equities were up 17.5% while Global Bonds were up 3.0%.

In a historic year with over 65 national elections, it was Donald Trump’s US election victory that had the starkest impact on markets. His expansionary fiscal policy and protectionist agenda were welcomed by surging US markets already thrilled by the prospect of easing monetary policy. The S&P500 closed the year up 27% in Sterling terms.

In UK markets, the FTSE All Share was slightly negative over the last quarter but delivered a good return for the year at 9.5%. The interaction between UK fiscal policies that strangle growth whilst driving inflation, will damage expectations for further loosening of monetary policy.

In a good year for growth investment style, allocations to Emerging Markets and Asia performed well. The MSCI Emerging Market returned 9.4% in Sterling terms whilst MSCI Asia was 14%.

Allocations to Japanese equity performed well with the TOPIX up 10% as the end of deflation, coupled with a weak yen and ongoing corporate reforms acted as tailwinds for Japanese equities. 

In the bond markets, the 10-year yields for US Treasuries and UK Gilts, both ended the year at 4.57%. Over 2024, this represented a notable rise for both markets, though higher in the UK, fuelled by investor anxiety over the £40bn tax increases announced by the Chancellor. Across our portfolios, weakness in government bonds was broadly offset by positive performance from allocations to Corporate Bonds, High Yield Bonds and Emerging Market Debt. 

Over the year, there were periods of significant volatility – in August and also in December – LV funds navigated those periods well and our 1-year performance was very strong across the range.