AJ Bell Funds and MPS performance – Q4 2023

Market and economic insights during Q4 2023

Fixed income markets

In fixed income markets, both interest rate and credit risk components aided returns. Longer dated US Treasury yields reversed the steep rises of the third quarter in remarkable fashion and the Federal Reserve joined the chorus by confirming rate cuts are indeed on the agenda.

In the UK, the Bank of England was more circumspective of inflation moving lower and pushed back on suggestions of aggressive interest rate cuts ahead, bringing about a rebound in the value of the pound versus major peers.

Equity markets

The rally in equity markets centred around Developed Markets such as the US and Europe. The UK market, when looking at the large cap index, was yet again subject to interference from the energy sector as the oil price erased its Israel-Gaza spike on weaker economic news.

The more domestically-orientated FTSE 250 and small cap indices did however join in with better sentiment coursing through markets.

Emerging markets

Emerging Market equities had China performing poorly on one hand and countries such as India and Brazil doing well on the other. The latter were free to rejoice in the easing of global financial conditions and capital flows brought about by a weaker US dollar.

Alternatives

Within alternatives, UK property took encouragement from the possible stabilisation and improvement of debt service costs. Discounts to latest asset valuations narrowed somewhat, however share prices on the whole remain significantly below the heights reached in late 2021 and early 2022.

Looking ahead to 2024

As we move to 2024, and all but discard ‘higher for longer’ to the scrapheap of ‘this time it’s different’ market dicta, there’s a sense that markets are looking to turn a corner. The last two years have been laden with predictions of recession and now that conditions most closely represent that of a recession, investors are looking out for better times ahead.

This is not without risk: the famed ‘soft landing’ is not guaranteed, and the rate hikes implemented over the past year in the UK, US and Europe will continue to bite in the months ahead.

Find more information on our AJ Bell Funds and diverse range of managed portfolio solutions by visiting our Investment Options.

Q&A with Ryan Hughes

AJ Bell Investments Director, Ryan Hughes, and our Director of Personal Finance, Laura Suter, sat down to discuss the performance of the AJ Bell Funds and MPS during Q4 2023, as well as key portfolio changes as we head into 2024.

Watch the Q&A session now or keep scrolling to read more about our Investments Team’s quarterly market and economic insights into:

• Fixed income markets
• Equity markets
• Emerging markets
• Alternatives
• Looking ahead to 2024

The Investment Asset

On top of our Q4 2023 performance update, we’ve launched The Investment Asset. Here you’ll find regular updates on the latest investment news and analysis directly from our Investments Team. We cover everything from changing macro-economic trends, market updates, events and insights to performance updates and key portfolio literature. Visit the page now for more information about:

• Q4 2023 AJ Bell Funds and MPS performance reports
• Key portfolio documents for our full range of AJ Bell Funds and MPS
• Our strategic asset allocation Q&A session with Ryan Hughes

VISIT THE INVESTMENT ASSET

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