January 2025

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2024: A Year of Global Market Growth

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Exploring 2024’s Global Markets

The global market outlook showed an improvement for 2024 with the US achieving more than 20% returns for a second consecutive year.

A quick look at a Global Market Growth table (below) comparing changes across key global indices puts the UK, as represented by the FTSE 100, in a relatively poor light. Figures suggest that the government has its work cut out persuading pension funds to divert more of their capital to UK companies, rather than the locomotive that is the US stock market. 

However, there are nuances that a simple annual performance table misses:

  • UK Performance and Dividends: The level of dividends on the UK stock market is generally higher than in other markets. This normally does not show up in index performance tables, as most indices only measure capital growth. Add in dividends and the total return on the FTSE 100 in 2024 was a more respectable 9.7%.
  • The US Market and the Magnificent Seven: The US stock market, as measured by the S&P 500, produced another powerful performance in 2024. Much of that was due to the so-called Magnificent Seven technology shares – Amazon, Apple, Alphabet (aka Google), Meta, Microsoft, Nvidia and Tesla. Together, those seven companies account for about one third of the value of the 500-company S&P 500. The significance of the Magnificent Seven becomes apparent when an alternative version of the S&P 500 is considered which gives every company the same index weight, meaning the septet becomes just 1.4% (7/500) of the index. In 2024, that equal-weighted index grew by 10.9%, not 23.3% of the main index.
  • Currency Effects: Often overlooked in index tables is the effect of currency – indices are normally quoted in local currencies. So while the Euro Stoxx 50 appears to have outperformed the FTSE 100 in 2024, that is not the case if you are a sterling-based investor. Over the year, the euro fell 4.4% against the pound, more than enough to counter the higher euro-based index growth. There is a similar story for Japan, where the strong performance of Japanese shares was pared back by an 8.7% decline in the Japanese Yen against the pound.

Table Of Global Market Growth

Index 2024 change
FTSE 100 +5.7%
Standard & Poor’s 500 +23.3%
Nikkei 225 +19.2%
Euro Stoxx 50 (€) +8.3%
Shanghai Composite +12.7%
MSCI Emerging Markets (£) +6.9%
MSCI AC World (£) +17.8%

 

Summary of 2024 Global Markets

The varying performance across global markets in 2024 reinforces the importance of diversification. Spreading your investments across different regions can help mitigate risk and potentially enhance returns. Want to navigate the complexities of global markets and optimise your investment strategy? Contact Chartwell today for expert guidance.

The value of your investment can go down as well as up and you may not get back the full amount you invested.

Past performance is not a reliable indicator of future performance.

Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.

We are family practice managed by highly qualified financial planners who are supported by an excellent administration team.

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We are family practice managed by highly qualified financial planners who are supported by an excellent administration team.

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