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15 Jan 2025
2 min read

Chart of the month: US equities lead the way

US equities were once again the leading major asset class in 2024, resulting from strong returns from the mega cap technology stocks known as the ‘Magnificent Seven’.

While the story of US equity outperformance has been very widely reported, perhaps there has been less focus upon the scale of the outperformance of US equities of almost every other asset class, not only in 2024 but over the last decade as a whole. It really is almost a case of US equities and the rest!

US equities returned 26.9% in 2024 for sterling investors, which is over 12% ahead of any other asset class shown in the chart above. 2024 was the 5th discrete year over the last decade that US equities topped the chart. The asset class has been second in a further three years in the decade. This has resulted in a remarkable gap of over 6% between the 10-year annualised performance of US equities, at 15.23%, and all other asset classes over the period. 

Equity returns dominated the chart in 2024, with emerging markets (14.8%) and Japanese equity (10.1%) both producing double-digit returns. Next in the chart were UK equities (9.5%) and Asia ex Japan (7.8%). The notable laggard in the equity markets was Europe ex UK, which produced a return of just 3.0% - significantly below all other equity returns in the chart. 

The 10-year annualised returns of global equites in Japan (9.0%), Europe (8.6%) and Asia ex Japan (8.6%) are closely grouped. Emerging markets (7.0%) and UK equities (6.2%) were slight laggards over the decade as a whole. 

At the foot of the chart for 2024 (occupying three of the four lowest positions) were the various fixed interest asset classes. International bonds (3.0%) and UK corporate bonds (1.8%) produced small positive returns, whereas gilts (-4.0%) were the only asset class on the chart that produced a negative return.

These three asset classes have occupied positions at the foot of the chart for each of the last four discrete years, with gilts in bottom spot for the third year out of the last four.

Source for all data points: LGIM and Bloomberg as at 31 December 2024.  Past performance is not a guide to the future.

Market movement Rally United States Asset allocation Multi-asset
Isabella Hughes

Isabella Hughes

Investment Specialist

Isabella (Ella) is an investment specialist within the Asset Allocation team focusing on wholesale strategies. Ella is an avid Arsenal fan who finds her calm…

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