10k Words Equitable Investors January 2025 Only Argentina's sharemarket outpaced the US in CY2024, with a mediocre performance from Australia; 10-year bond yields expanded despite the Federal Reserve's rate cuts; the AUD battled while the USD went from strength-to-strength; while natural gas was the commodity of choice. We can't help but highlight the concentration in the US market once again; while its pricing is dependent on a resurgence in earnings outside the tech sector. The thing about high multiples for the S&P 500 is that they tend to be followed by low 10-year returns. Maybe that is why money flowed out of active equities funds in CY2024. We take a look at the implications of volatility on small cap returns and the severity of drawdowns that have been seen across asset classes through the decades. Then we see just how big a part of the global investment pie equities have become. Finally, we look at the increased role government borrowing has played in the US and government spending has played in Australia. Global equity ETF total returns for 2024 (in USD) Source: Koyfin, Equitable Investors Government bond yield movements in CY2024 Source: Koyfin, Equitable Investors Currency performance in CY2024 Source: Koyfin, Equitable Investors Commodities performance in CY2024 Source: Koyfin, Equitable Investors Share of total S&P 500 market cap held by 5 largest stocks Source: Bianco Research Year-on-year S&P 500 earnings growth - historical and projected Source: Callie Cox Media, Bloomberg S&P 500 forward P/E and subsequent 10-year returns Source: @thejoshviljoen Active equities fund outflows in 2024 Source: Financial Times Percentage of trading days with moves of 1% or more in the Russell 2000 over the last 25 years Source: Royce & Associates Drawdowns - the latest prices in relation to the previous all-time high Source: Topdown Charts Composition of the global market portfolio Source: State Street Global Advisors Evolution of the composition of the global market portfolio
Source: State Street Global Advisors US debt growth breakdown
Source: @TheKingCourt Data demand growth driving a surge in data centre power use
Source: @AvidCommentator January 2025 Edition Funds operated by this manager: Equitable Investors Dragonfly Fund Disclaimer Past performance is not a reliable indicator of future performance. Fund returns are quoted net of all fees, expenses and accrued performance fees. Delivery of this report to a recipient should not be relied on as a representation that there has been no change since the preparation date in the affairs or financial condition of the Fund or the Trustee; or that the information contained in this report remains accurate or complete at any time after the preparation date. Equitable Investors Pty Ltd (EI) does not guarantee or make any representation or warranty as to the accuracy or completeness of the information in this report. To the extent permitted by law, EI disclaims all liability that may otherwise arise due to any information in this report being inaccurate or information being omitted. This report does not take into account the particular investment objectives, financial situation and needs of potential investors. Before making a decision to invest in the Fund the recipient should obtain professional advice. This report does not purport to contain all the information that the recipient may require to evaluate a possible investment in the Fund. The recipient should conduct their own independent analysis of the Fund and refer to the current Information Memorandum, which is available from EI. |