The People’s Bank of China has once again shown its intention to kick-start the stalling Chinese economy.
At the start of 2024, China set out a growth target of 5%, which is well below its historical growth targets. However, it remains higher than that of most developed economies, like the US and the UK.
China will meet this growth target, but only just. Throughout the year, they seemed to lag behind the pace, with second and third quarter growth falling short of the annualised 5% target.
However, in the fourth quarter the economy grew 5.4% year on year, bolstered by government stimulus and an increase in exports.
Although the 2025 growth target hasn’t been announced yet, the consensus is it will once again be 5%. The threat of tariffs from new US President Donald Trump might make that a challenging ask.
The Chinese economy has been battling a host of issues since the pandemic. Growth has slowed, consumer confidence is low, there are concerns of deflation, and the real estate market has struggled.
During 2024, the People’s Bank of China attempted numerous measures to combat many of these issues, but with limited success.
Unlike most countries, where central banks have just one interest rate policy to stimulate or slow the economy, the People’s Bank of China can use different interest rates to target different parts of the economy.
Last year, they cut their short-term seven-day interest rate twice to target consumers. They also cut the five-year interest rate three times to target mortgage rates and property demand.
While this stimulus package was good for the Chinese stock market, December inflation was just 0.1% year on year. This shows that consumers are still low on confidence and that deflation remains a real concern.
However, in 2025, the People’s Bank of China appears to be taking a more conventional route on monetary policy. It’s expected to cut its base interest rate at an ‘appropriate time’, which is more in line with how other central banks typically operate. They hope that cutting the base rate will encourage consumers to spend and invest again.
What’s happened in Europe?
Just before the year ended, the French government collapsed following Prime Minister Michel Barnier losing a vote of no confidence after his controversial budget plans.
Now, François Bayrou has taken over the responsibility and will try to reach a new agreement.
He faces a difficult task as the French budget deficit is set to hit 6.3% and dwarfs the 3% limit required by Brussels as part of European Union membership.
The three-party German coalition also collapsed in 2024. The public now heads to the polls in February to vote on who will take charge of Europe’s largest economy.
Polls suggest that the right-leaning Christian Democratic Union (CDU) is leading, along with the far-right Alternative for Germany (AFD). As it stands, no party will have enough votes to form a government, so Germany will likely once again need a coalition.
Martial law in South Korea – what happened?
In South Korea, suspended President Yoon has finally been arrested after attempting to implement martial law in early December.
Yoon was suspended from his role as the country's president after being impeached by the government.
Since then, Finance Minister Choi Sang-Mak has been leading the country. It’s uncertain what the outcome of all this will be for the country and for investors.
This article isn’t advice. Investments and any income they produce will rise and fall in value, meaning you could get back less than you invest. If you’re not sure if an investment is right for you, ask for financial advice. Remember, past performance isn’t a guide to the future.
Which stock markets have performed best and worst?
Despite all of this, global stock markets have seen positive results for the 12 months to the end of December. Over the past year, the broader global stock market has risen 20.13%*.
The US stock market was the driving force behind global gains, returning 26.77%.
The US benefited from being the front runner in the advancements of artificial intelligence (AI) and the opportunities that it might create. The ‘Magnificent 7’ (Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia and Tesla) continued to lead the way and take the majority of the returns in the US.
Somewhat amazingly, and despite the on-going concerns, the Chinese stock market also performed well, returning 21.82%. The stock market has benefited from on-going stimulus measures being applied by the central bank.
The Brazilian stock market was one of the worst-performing stock markets returning -28.21%. This is despite the country’s GDP increasing 3%, which was double what was expected at the start of the year.
However, investors remain cautious on current President Luiz Inácio Lula da Silva, who has increased spending dramatically. This has caused the central bank to increase interest rates to ward off inflation, but this has been a headwind for the stock market.
From a sector level, the technology sector performed the best, returning 34.24%. Material stocks lagged the wider market, returning -6.08%.
One-year stock market performance
Dec 2019 To Dec 2020 | Dec 2020 To Dec 2021 | Dec 2021 To Dec 2022 | Dec 2022 To Dec 2023 | Dec 2023 To Dec 2024 | |
|---|---|---|---|---|---|
MSCI AC World | 13.22% | 20.14% | -7.62% | 15.88% | 20.13% |
MSCI ACWI/Information Technology | 41.62% | 28.87% | -22.15% | 42.91% | 34.24% |
MSCI ACWI/Materials | 17.72% | 16.33% | 0.06% | 6.31% | -6.08% |
MSCI Brazil | -21.37% | -16.42% | 29.05% | 25.86% | -28.21% |
MSCI China | 25.66% | -20.92% | -11.95% | -16.05% | 21.82% |
MSCI North America | 16.88% | 28.14% | -8.94% | 19.45% | 26.77% |
How have our Wealth Shortlist funds performed?
Global funds on the Wealth Shortlist delivered mixed performance over the past year, with some faring better than others.
2024 has again been led by just a few companies. The US technology names that did so well in 2023 have continued to perform well. They made up over half the returns of the S&P 500 in 2024.
Investors are expecting AI to revolutionise business and make them more efficient, while offering better products and services. The expectation is that the Magnificent 7 are in the best place to facilitate those improvements going forward.
A year is a short time to assess the skills of a fund manager though. Managers with different strengths, styles and areas of focus will perform differently over time.
Investing in funds isn't right for everyone. Investors should only invest if the fund's objectives are aligned with their own, and there's a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest, and make sure any new investment forms part of a long-term diversified portfolio.
For more details on each fund and its risks, please see the links to their factsheets and key investor information below.
Artemis Global Income has been the best-performing fund in the global sector of the Wealth Shortlist over the past 12 months.
Managed by experienced investor Jacob de Tusch-Lec, the fund returned 26.81%* versus 10.97% for the IA Global Equity Income peer group. This is despite having no exposure to the Magnificent 7.
We like de Tusch-Lec’s contrarian approach to investing, but it can mean the fund investing very differently to its peers.
Our analysis suggests de Tusch-Lec’s stock selection has been the main driver of returns over the past 12 months. In particular, selections in Europe and Japan, as well as investments in industrials, have all benefited the fund’s performance.
The fund can invest in smaller companies as well as emerging markets which can increase risk. The manager can also use derivatives which if used increases risk.
The Troy Trojan Global Income fund was the weakest performing fund in the global sector of the Wealth Shortlist, returning 8.70% over the past 12 months.
James Harries, who manages the fund, has a stellar long-term record in protecting investors’ money. Harries' focus on high-quality companies and a more conservative investment approach means we expect the fund to hold up relatively well when markets fall.
In contrast, we expect the fund to lag the peer group when markets rise quickly. This has been the case more recently with markets rallying, particularly in the US and in the tech sector.
We still rate the team’s disciplined investment approach – it’s been used across a range of funds over the years with good outcomes.
The fund can invest in emerging markets, as well as use derivatives, which can add risk. The fund can also be concentrated meaning a few stocks can have a greater impact on performance, but this approach also adds risk.
Annual performance growth
Dec 2019 To Dec 2020 | Dec 2020 To Dec 2021 | Dec 2021 To Dec 2022 | Dec 2022 To Dec 2023 | Dec 2023 To Dec 2024 | |
|---|---|---|---|---|---|
Artemis Global Income | 0.39% | 26.48% | -2.54% | 9.71% | 26.81% |
Trojan Global Income | 2.34% | 16.74% | -1.10% | 1.43% | 8.70% |
IA Global Equity Income | 3.47% | 19.01% | -1.32% | 9.41% | 10.97% |
MSCI AC World | 13.22% | 20.14% | -7.62% | 15.88% | 20.13% |