The three months to the end of July 2024 saw a lot of political change across the globe. Labour won a huge majority here in the UK. France’s surprise election resulted in no party with a clear majority. And in the US, Joe Biden stepped down from his re-election bid, endorsing Kamala Harris who already seems to be making a big impact on the polls.
At the same time, we’ve seen central banks changing their tune. The European Central Bank cut interest rates in June and the Bank of England did the same on 1 August. Meanwhile Japan surprised investors with an interest rate rise.
Here’s which markets did best and worst over the quarter and the impact that’s had on mixed asset funds.
This article isn’t personal advice. If you’re not sure whether an investment is right for you, ask for financial advice. Investments and any income they produce can fall as well as rise in value, so you could get back less than you invest. Past performance isn’t a guide to the future.
How have stock markets performed?
Despite all the political changes, shares broadly delivered positive returns over the quarter, with the MSCI All Country World index growing 5.51%*.
US shares performed particularly well, with the MSCI USA index returning 7.12%. The US continued its strong run, meaning over the 12 months to the end of July, the index returned 22.23%, driving broader global markets higher.
The worst performing index over the last three months was MSCI Europe ex UK, which saw gains of 1.96%. These added to previous positive returns, meaning 12 month returns to end July in the region have been 10.99%. France’s surprise election caused some volatility and losses in French shares. The French stock market is the biggest region in the index, and these losses held back returns.
The MSCI Emerging Markets index saw the smallest gains over the last year, returning 6.86%. Chinese shares have struggled which weighed on performance.
Remember though, these are very short time periods, and volatility should be expected.
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How have bonds performed?
Bonds had a good three months, with most areas in bonds markets providing gains. Yields have broadly fallen (meaning prices have risen) because of the expectation central banks are entering an interest rate cutting cycle.
This has already started in Europe and the UK, and it’s expected the Federal Reserve will do the same in the US when they meet in September. The size of each cut and how many cuts are to come is still the big question for investors.
Returns over the last year have been similar across most bond sectors, with the exception being Index-Linked gilts. The IA £ High Yield sector provided the best return of 10.85%* while the IA UK Index Linked Gilt sector returned just 1.73%.
How have mixed asset and total return funds performed?
Funds invested more in shares than in bonds have seen better returns over the past five years. Funds in the IA Flexible Investment and IA Mixed Investment 40-85% Shares sectors performed best because they generally invested more in shares.
This trend has kept going over the past year. The best performing mixed-asset sector over the last 12 months was the IA Mixed Investment 40-85%, with performance of 10.56%. Funds in this sector tend to have more invested in shares, which has helped them perform better.
The worst performing sector was the IA Mixed Investment 0-35% Shares sector. The average fund in this sector returned 7.62%. These funds invest more in bonds which haven’t performed as well as shares over the 12 months.
Annual percentage growth
Jul 19 – Jul 20 | Jul 20 – Jul 21 | Jul 21 – Jul 22 | Jul 22 – Jul 23 | Jul 23 – Jul 24 | |
|---|---|---|---|---|---|
IA £ High Yield | -0.16% | 10.70% | -8.83% | 4.12% | 10.85% |
IA Flexible Investment | -2.66% | 19.73% | -4.47% | 2.31% | 10.14% |
IA Mixed Investment 0-35% Shares | 0.18% | 7.07% | -7.07% | -2.11% | 7.62% |
IA Mixed Investment 20-60% Shares | -2.32% | 13.26% | -5.42% | -0.02% | 9.06% |
IA Mixed Investment 40-85% Shares | -3.12% | 18.03% | -4.26% | 1.52% | 10.56% |
IA Targeted Absolute Return | -0.33% | 6.88% | -0.47% | 1.56% | 8.42% |
IA UK Index Linked Gilt | 9.67% | 1.35% | -20.24% | -21.79% | 1.73% |
MSCI Emerging Markets | -0.25% | 14.23% | -8.33% | 2.93% | 6.86% |
MSCI Europe ex-UK | -2.78% | 26.38% | -6.51% | 16.12% | 10.99% |
MSCI USA | 5.52% | 29.99% | 6.41% | 7.00% | 22.23% |
How have our Wealth Shortlist funds performed?
Our Wealth Shortlist funds have performed differently over the past year. But with different approaches and objectives, expect them to perform differently.
Remember, 12 months is a short time when looking at investment has performance. Investments should be held as part of a diversified portfolio for the long term – at least five years.
Investing in these 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.
For more details on each fund and its risks, including charges, see the links to their factsheets and key investor information.
BNY Mellon Multi-Asset Balanced
BNY Mellon Multi-Asset Balanced was the strongest performer on the Wealth Shortlist in this sector, returning 11.03%**. This is above its IA Mixed Investment 40-85% peer group average of 10.56%.
The fund invests in shares, bonds, and cash, but with a focus on shares. The shares part of the fund centres on the US, UK, and Europe.
Over the last 12 months, shares added the most value. With how much is invested in shares, it’s expected this will have the biggest impact on overall performance.
Bonds also gained in value, but the lower portion invested in bonds means the gains had less of an impact on overall performance.
The manager can invest in emerging markets, smaller companies, high yield bonds and derivatives, which add risk if used.
Troy Trojan
Troy Trojan was the worst performing Wealth Shortlist fund in the sector over the last 12 months, returning 5.66%.
The managers aim to grow investors' money steadily over time, while limiting losses in falling markets, instead of trying to shoot the lights out and perform strongly at all times.
It invests in a diversified set of shares, bonds, and gold. While its investments in gold have added value, the shares and bonds haven’t provided much in the way of positive returns. This has resulted in the smaller positive return over the year compared to other funds.
The managers can invest in smaller companies, which adds risk. While the fund contains a diverse range of investments, it’s concentrated. This approach means each investment can contribute significantly to overall returns, but can increase risk.
Annual percentage growth
Jul 19 – Jul 20 | Jul 20 – Jul 21 | Jul 21 – Jul 22 | Jul 22 – Jul 23 | Jul 23 – Jul 24 | |
|---|---|---|---|---|---|
BNY Mellon Multi-Asset Balanced | -2.86% | 20.30% | 2.75% | 5.36% | 11.03% |
IA Mixed Investment 40-85% Shares | -3.12% | 18.03% | -4.26% | 1.52% | 10.56% |
Troy Trojan | 6.06% | 9.85% | 1.23% | -0.95% | 5.66% |