As 2024 draws to a close, Fidelity International, reflects on a year of shifting market conditions and evolving investor sentiment.
Following the challenges of 2023, marked by inflationary pressures and rising interest rates, 2024 saw a shift as inflation stabilised, interest rates eased and investor focus turned towards sectors such as technology.
Equities led the charge, with US stocks standing out as the year’s top performer, while other assets like real estate and emerging markets also saw notable recoveries.
| Asset class | 2024 year-to-date (%) | 2023 (%) |
| US Equities | 28.45 | 14.75 |
| Global Equities | 21.19 | 10.64 |
| Asia Pacific Equities | 12.20 | -4.27 |
| UK Equities | 10.75 | 3.27 |
| Real Estate | 9.91 | -1.80 |
| Japanese Equities | 9.35 | 9.81 |
| High-yield bonds | 8.47 | 5.04 |
| Emerging Market Equities | 8.47 | -1.32 |
| Emerging Market Debt | 8.37 | 3.99 |
| Cash | 4.89 | 4.28 |
| Commodities | 4.63 | -10.63 |
| European Equities (ex. UK) | 3.67 | 8.34 |
| Corporate Bonds | 3.58 | 1.75 |
| Inflation-Linked | 0.26 | -1.37 |
| Government Bonds | -1.12 | -2.68 |
1Source: Fidelity International, December 2024. Datastream: Annualised total returns in GBP from 1.01.24 to 11.12.24
Tom Stevenson, Investment Director for Personal Investing at Fidelity International, comments: “After the turbulence of 2023, we’ve seen a marked shift towards growth, driven by stabilising inflation and a more positive outlook for interest rates. US equities have led the way, delivering 28.5% year-to-date return, up from 14.8% in 2023, fuelled by a tech-rally, stronger-than-expected corporate earnings and optimism around AI-driven growth. Global equities followed closely with a 21.2% return, while UK equities saw a marked improvement, rising by 10.8%, up from 3.27% the previous year.
“Asia Pacific equities rebounded from a 2023 decline, posting a 12.2% gain. Real estate also staged a recovery, shifting from a -1.8% loss in 2023 to a 9.9% rise. Meanwhile, Japanese equities held steady with a 9.4% gain, European equities (excluding the UK) underperformed with just a 3.7% rise, down from 8.3% in 2023, amid lingering economic uncertainty.
“Beyond equities, other asset classes also showed strength. High-yield bonds and emerging market debt both recorded gains of over 8%, reflecting increased risk appetite as fears of a global recession subsided. Commodities rebounded to a modest 4.6% gain, supported by stabilising oil prices. However, government bonds continued to face pressure, with a -1.1% decline as interest rates stayed higher for longer than expected. Inflation-linked bonds struggled to recover, managing only a 0.3% gain after a -1.4% drop in 2023. Cash delivered a steady 4.9% return, but riskier assets outpaced it, underscoring a shift in investor appetite.”
How did Fidelity’s clients react in 2024? The best sellers
Data from Fidelity reveals how investors navigated the market in 2024, with a clear preference for global exposure and technology-focused funds. Passive investments, particularly those tracking global and US markets, proved popular, but active strategies were not overlooked, with Jupiter India Fund capturing the attention of investors, as they looked for a balanced approach to their investments. The presence of cash-focused funds also highlights how investors sought to balance risk and return.
2Source: Fidelity International, 2024 data as at 1.1.24-12.12.24
Tom Stevenson comments: “Investors in 2024 have demonstrated a clear preference for global exposure and growth sectors, especially through passive index funds. The strong performance of US equities this year, combined with interest in technology and emerging markets, has driven significant demand for funds like Legal & General Global Technology Index Trust and Jupiter India Fund. At the same time, more defensive options such as Legal & General Cash Trustand Royal London Short Term Money Market fund were popular, showing how investors balanced their portfolios by combining growth opportunities with more stable investments.”
The data also reveals that investors showed a preference for investment trusts offering exposure to global growth, technology and income-focused strategies. Investment trusts such as JP Morgan Global Growth & Income and Alliance Trust were among the best sellers, highlighting investor interest in global diversification and income generation.
| Top 10 selling ISA investment trusts on the Fidelity Personal Investing Platform 2024 | Top 10 selling SIPP investment trusts on the Fidelity Personal Investing Platform 2024 |
| JP Morgan Global Growth & Income | JP Morgan Global Growth & Income |
| Alliance Trust | City of London Investment Trust |
| City of London Investment Trust | Fidelity European Trust |
| Greencoat UK Wind | Alliance Trust |
| Polar Capital Technology Trust | SDCL Energy Efficiency Income |
| F&C Investment Trust | HICL Infrastructure |
| TwentyFour Select | F&C Investment Trust |
| Law Debenture Corporation | JP Morgan American Investment Trust |
| JP Morgan American Investment Trust | Brunner Investment Trust |
| Henderson Far East Income | Greencoat UK Wind |
3Source: Fidelity International, 2024 data as at 1.1.24-12.12.24
Tom Stevenson comments: “2024 saw strong demand for investment trusts that offer both growth and income potential. Funds like JP Morgan Global Growth & Income and City of London Investment Trust stood out, reflecting investors’ desire for global diversification and reliable income. Additionally, funds focused on specific sectors like technology and renewable energy, including Polar Capital Technology Trust and Greencoat UK Wind, were popular choices. At the same time, infrastructure-focused investments like HICL Infrastructure and SDCL Energy also saw strong demand, reflecting investor interest in stable, long-term income streams.”
The top sellers among individual company shares reveal investors favouring a mix of blue-chip, income-generating stocks and those offering growth potential. Legal & General and M&G were among the top-sellers, as well as stocks in sectors such as defence, pharmaceuticals and infrastructure.
| Top 10 selling ISA shares on the Fidelity Personal Investing Platform 2024 | Top 10 selling SIPP shares on the Fidelity Personal Investing Platform 2024 |
| Legal & General | BP |
| BP | Legal & General |
| 3i Group | 3i Group |
| National Grid | Phoenix Group Holdings |
| M&G | HG Capital Trust |
| Aviva | GlaxoSmithKline |
| BAE Systems | Rio Tinto |
| Phoenix Group Holdings | M&G |
| HSBC Holdings | Prudential |
| HG Capital Trust | John Wood |
4Source: Fidelity International, 2024 data as at 1.1.24-12.12.24
Tom Stevenson comments: “The list reveals a strong home bias, and a preference for well-established, income-generating companies, with stocks like Legal & General and BP leading the way. Alongside these choices, there was also a strong demand for stocks with growth potential, such as BAE Systems and 3i Group. Additionally, infrastructure-related stocks like National Grid and Phoenix Group Holdings highlighted an ongoing desire for reliable, long-term investments.”
