Quarterly Investment Report – April 2024

Share this post

Delayed Not Derailed

The strong momentum behind markets continued throughout the first quarter of 2024, with the Global Equity index climbing 14%, taking its annual return to 26%. 

Our report examines the key themes driving markets, risks and opportunities for 2024 and beyond. 

We expect diverging views on the direction of interest rates to present opportunities to increase equity exposure; however, until then, we will remain patient. The outlook continues to support our overweight position in fixed-interest credit strategies, which benefit from high rates and low defaults.

Summary of latest insights

  • Growth Momentum – The IMF has raised its global growth forecast for 2024 to 3.2%, citing the U.S. economy and improved trade activity. Global manufacturing is expanding for the first time in 18 months, accompanied by sustained service spending. 
  • Policy Challenges – Despite a promising start to the year, the challenges of 2023 persist, with ongoing debates around inflation, rates, growth and valuations. Recent inflation data has delayed rate-cut expectations, placing renewed pressure on central bankers. 
  • Offsetting Factors – The U.S. economy is thriving, thanks to low fixed-rate loans from the pandemic and higher income from increased cash rates. Conversely, Australia faces slower growth due to its high exposure to variable interest rates; however, fiscal policies and factors such as limited housing supply and record immigration are offsetting these effects, leading to stubborn inflation data and questions over rate cuts. 
  • Long-Term Trends Intact – We believe the recent inflation data does not mark the end of disinflationary trends but suggests that rate cuts are merely delayed, not derailed. Economic activity is anticipated to improve as inflation and interest rates ease.
  • Balancing Risk With Opportunity – We view the risk-return ratio for equities as neutral and recommend maintaining allocations close to strategic targets, with a slight underweight in global equities due to valuation pressures. The recent 5% pullback did not alter our view; we would prefer a correction greater than 10%, in line with historical trends. 
  • Fixed Interest: Paid To Wait  – We maintain an overweight position in fixed interest through investment-grade credit, which offers more attractive yields than equities and less valuation pressure. This approach ensures steady income as we await further market opportunities.
AUS

General Advice Warning: Any comments in this communication do not consider your objectives, financial situation or needs. Before acting on any general advice, consider whether it is appropriate for you.

Read related market insights, updates and Quarterly Reports.

Education Insights

It’s always the right time to prioritise financial education and pave the way for informed, confident financial decisions. Whether you’re new to investing or experienced, the content below is designed to boost your confidence and help you plan for a brighter future.

Read more

Market Update – June 2022

Recent financial market developments have many investors understandably nervous. Tackling price inflation through higher interest rates has become a global phenomenon. Tighter than expected financial conditions indicate a meaningful economic slowdown, and recent equity market weakness reflects this.

Read more

Quarterly Investment Report – April 2025

The first quarter of 2025 brought a notable shift in market conditions, driven by renewed geopolitical tension, shifting policy expectations, and deteriorating investor sentiment. In this environment, it’s easy to focus on what can go wrong. But extreme pessimism often signals a turning point.

Read more

This website uses cookies to ensure you get the best experience on our website.