StashAway’s 2024 Returns

Capturing growth over a year of diverging global markets

2024 was a year of divergence across major asset classes. On the one hand, global equities and gold posted significant gains – 18% and 27%, respectively – driven by a combination of solid economic growth, healthy corporate earnings, exuberance for tech, and Fed rate cuts.

On the other hand, global bonds posted negative returns of 3% for the year – weighed down by still-sticky inflation, concerns about government debt issuance (especially the US), and increasing uncertainty about the path of central bank policy.

This is in line with how asset classes tend to perform in an environment of “Inflationary Growth” – where growth is solid and inflation is sticky. Given our ERAA®-managed portfolios’ positioning for such an environment, that has enabled them to post solid absolute returns, and continue to outperform their same-risk benchmarks on average in 2024.

Here’s how the portfolios on our platform performed in 2024:

• General Investing portfolios powered by StashAway 
• General Investing portfolios powered by BlackRock
• Responsible Investing portfolios 
• Thematic portfolios

General Investing portfolios powered by StashAway

StashAway’s General Investing (GI) portfolios were up +8.1% on average in USD terms. That compares with an average of +7.2% for their same-risk benchmarks in USD terms. 

Navigating 2024’s asset class divergence

The wide dispersion in major asset classes this year – with gold and equities seeing double-digit gains, and bonds posting declines – is not a common occurrence. Over the past four decades, this combination has only occurred once: in 2005. 

Back then, the economy was doing well, inflation was also rising, and the Fed was hiking rates. With the exception of the Fed now being in a cutting cycle, we’re in a similar macro environment today – one that our Economic Regime Asset Allocation (ERAA®) framework labels as “Inflationary Growth”, and which it signalled that we entered in April of last year.

Against this backdrop, the outperformance of gold and equities benefitted our ERAA®-managed GI portfolios in terms of strong absolute returns. In the more conservative portfolios, we navigated this tough environment for fixed income by allocating to ultra-short-duration bonds and gold.

Looking ahead, we expect macroeconomic factors to keep us in this regime of Inflationary Growth in the year ahead – which should continue to benefit equities and real assets like gold. For more on that, see our 2025 Macro Outlook: “FAT” is the new normal.

Gold shone in 2024 amid market volatility and geopolitical uncertainty

The strong performance of gold in 2024 – with gains of 27% – can be attributed to a number of cyclical and structural reasons. Safe-haven demand during periods of market volatility, elevated geopolitical tensions, and sticky inflation were near-term factors underpinning the asset class. Meanwhile, concerns over increased US government bond issuance and global central banks’ demand for the asset remain longer-term sources of support.

These considerations were the basis for our ERAA® investment framework's overweight allocations to gold – and which served as one of the main drivers of its portfolios’ performance last year. During that period, the portfolios’ allocations to the asset class contributed between 14–45% of total returns from the lowest to highest-risk portfolios. 

Equities rallied in 2024, driven by the US and Big Tech

Global equities had a solid year in 2024, with the asset class gaining 18%. It was a bumpy ride to get to that point, however, with sizable market corrections in April and August.

Most of the year’s strong performance was driven by the US market, with large-cap American equities outperforming all major global markets. Within the US, mega-cap tech continued to dominate – as illustrated in Chart 2 below, the communications services, information technology, and consumer discretionary sectors led the pack. 

Here, ERAA®'s allocations to broad US equities helped capture these gains, especially in the higher-risk portfolios. Pulling in the other direction, its underweight allocation to communications services and its overweight allocations to healthcare and energy were detractors to relative performance.

ERAA®’s fixed income allocations outperformed, despite the asset class’s weaker showing

Despite the start of major central bank easing cycles, global bonds continued to face headwinds in 2024 – as economic resilience and concerns about sticky inflation tempered expectations for rate cuts. In total, global government bonds were down 3% for the year.

Our GI portfolios navigated this challenging environment via ERAA®'s overweight positioning on ultra-short-duration US Treasuries, which offered still-elevated yields at low risk. Its allocations to higher-yielding parts of the fixed income market – including non-investment grade corporate and emerging market debt – also supported performance.

General Investing portfolios powered by BlackRock 

The General Investing portfolios powered by BlackRock posted solid absolute returns and outperformed versus their same-risk benchmarks on average this year. They were up +13% on average in USD terms, versus +12.5% for their benchmarks in USD terms.

Here’s a detailed commentary on the latest reoptimisation by BlackRock.

Responsible Investing portfolios

The Responsible Investing (RI) portfolios – which optimise for both long-term returns and ESG impact – also continued to deliver positive absolute returns across StashAway Risk Indexes (SRIs) and outperform their same-risk benchmarks on average in 2024.

For the year, they were up up +10.7% on average in USD terms. That compares with a +9.5% gain on average for their same-risk benchmarks.

As with our GI portfolios, our RI portfolios benefitted from allocations to ESG-screened large-cap US and global equities, especially in the higher-risk portfolios. Gold’s strong performance was also a major contributor to returns – or between 13–24% across risk levels. In the lower-risk portfolios, ERAA®’s allocations to ultra-short-duration bonds were also a key source of support.

Thematic Portfolios

The Thematic Portfolios showed mixed performance over the last year. While the tech-focused Technology Enablers and Future of Consumer Tech portfolios benefitted from the AI-related stock rally and posted the strongest gains, the Environment and Cleantech and Healthcare Innovation portfolios posted declines for the year.

As a note, we refreshed our Thematic Portfolios toward the end of 2024 to reflect the latest developments in the thematic investing universe.

Technology Enablers

The Technology Enablers portfolios posted returns of +24.2% on average in USD terms for the year. 

The rally in stocks related to AI was a major driver behind market returns in 2024 – and these portfolios were key beneficiaries. The cloud computing sector was the largest contributor to the portfolios’ performance, accounting for a quarter of returns. The semiconductor sector similarly remained a key contributor. The rally in crypto, particularly in the latter part of the year, also lifted blockchain-related companies. (For more on AI, see CIO Insights: What’s next for investing in AI?) 

Future of Consumer Tech

The Future of Consumer Tech portfolios saw returns of +12.3% on average in USD terms for the year.

Esports and gaming were the main drivers of returns for these portfolios in 2024, reflecting both robust growth in the global video game industry as well as strong performance from the semiconductor industry. The fintech sub-sector was also a key contributor, buoyed by solid performance from the traditional financial (“TradFi”) industry as well as its exposure to crypto-related companies like Coinbase. Pulling in the other direction, the global autonomous and electric vehicle industry was a slight detractor.

Healthcare Innovation

The Healthcare Innovation portfolios posted returns of -3.4% on average in USD terms for the year.

The healthcare sector faced muted performance in 2024 due to a number of headwinds – from drug pricing and regulatory pressures, to uncertainty stemming from US President-elect Trump’s potential policies. The negative performance in the Healthcare Innovation portfolios last year was largely driven by the ARK Genomic Revolution ETF (which we’ve since reoptimised out of our investment universe with our Thematic refresh), as well as a broad-based downturn in the sector’s performance towards the year-end. 

That aside, its allocations to the healthcare tech subsector and the global healthcare industry supported returns. In lower-risk portfolios, balancing assets like gold and ultra-short-duration Treasuries were also sources of defense.

Environment and Cleantech

The Environment and Cleantech portfolios saw returns of -2.8% on average in USD terms for the year.

The global clean energy sector was the main detractor for these portfolios due to major solar and wind companies facing sales slumps, as well as uncertainty tied to Trump’s policy agenda – in particular, any scope to repeal or scale back the US Inflation Reduction Act. The global uranium sector, which we added in the Thematic refresh in Dec, also saw a dip towards the year-end. Offsetting those declines were allocations to smart-grid infrastructure companies, as well as the water and environmental services subsectors.

Disclaimers:

Model portfolio returns are expressed in gross terms before fees, withholding taxes, and reclaims on dividends. They are provided only as a gauge of pure performance before other items.

Actual account returns may deviate from the model portfolios due to differences in the timing of trade execution (e.g. during the day vs close), timing differences and intraday volatility of reoptimisation and rebalancing, fees, dividend taxes and reclaims, etc.

Past performance is not a guarantee for future returns. Before investing, investors should carefully consider investment objectives, risks, charges and expenses, and if need be, seek independent professional advice.

This communication is not and does not constitute or form part of any offer, recommendation, invitation or solicitation to purchase any financial product or subscribe or enter any transaction.

This communication does not take into account your personal circumstances, e.g. investment objectives, financial situation or particular needs, and shall not constitute financial advice. You should consult your own independent financial, accounting, tax, legal or other competent professional advisors.