Schroders Equity Lens March 2024: your go-to guide to global equity markets

Along with the equity, credit, EM, and CIO Lens which have been running for some time, in 2024 we added the economics lens, real estate lens and the private equity lens. If you would like to learn more about any of these, please let me know. If you have feedback on any of the Lens publications, from you or your clients, we always love to hear it.

Summary:

• Stock market returns have been better if you invested when the market was at an all-time high than when it wasn’t. Staying invested at such times has been far more profitable than selling (slides 5-7 and read more)

• Stocks have returned 11% above inflation in the 12-months after the Federal Reserve (“Fed”) starts cutting rates, on average – based on analysis of 22 rate cutting cycles since 1928 (slides 8 and 9 and read more).

• Average returns have been better if a recession is avoided but good even if one wasn’t. Stocks have beaten bonds and obliterated cash (slides 8 and 9).

• The Magnificent-7 are up 94% since start of 2023, the rest of the world 20%. They make up more of MSCI ACWI than Japan, UK, France, Canada and China, combined (slides 10-11). But performance divergence among them is growing (slide 12)

• Deviating from the market has been a winning strategy when concentration has been high (slide 13 and read more)

• Smaller companies are cheaper vs history: true within markets (equal weighted vs market-cap weighted) and between markets (small caps vs large)

Chart of the month:

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