IDAD Performance – Q3 2024
Q3 2024 was another broadly stable period for global markets – slightly positive for Japan, Europe and the UK, but another 5%+ quarter for the S&P 500 (the US really is good at capitalism). The standout for the quarter was China/Hong Kong – major indices up almost 20% over the period, largely as a result of positive signals regarding support for the economy, in particular lending relaxations and support for the property sector. Volatility has remained high in these markets, but the intention seems to be to engender more domestic support for stockmarkets and, so far, it seems to be working. It can still be difficult for foreign investors (US in particular) to invest in Chinese equities, but the region seems to be finding some favour again. One swallow doesn’t make a spring, but we do see value in the use of these underlyings for products with protection features. The biggest story ahead is obviously the US election. It’s hard to call, but from an investment perspective, although we may see some action on the interest rate front (higher for longer) either candidate winning will likely be fair to positive for US equities. Concerns will be around instability post-election (think invading the Capitol again).
There were 136 new products launched during the quarter and 117 maturities – many delivering strong returns, which has boosted our annual return back above 8% for each year invested. If you’re reading this, you may remember some of our early ‘callable’ product launches – the MD’s favourite product shape by the way. These are now starting to come to their final maturity points and are delivering exceptional returns (up to 12% per year). We have added new issuing banks to our international product roster recently. Whilst we’re comfortable with all the issuers we work with, diversification of counterparties in client portfolios is always a good thing. The payoffs we’re currently offering ‘off the shelf’ remain mostly low-medium risk, reflecting a slight nervousness about market prospects.
Fund performance was steady for Future Wealth – down 0.3% and strong for Refined Growth – up 4.8%. Both funds are over 10% up year to date.
Clive Moore, September 2024
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