13 Dec 2023 4 min read

As we optimistically set our new year's resolutions, our attention has turned to what's next. Here are 10 themes our Asset Allocation team will be mulling over before welcoming in the new year.



2023 saw a new entrant to JPMorgan’s Global Bond Index-Emerging Markets announced. Indian government bonds were given the green light to join the index from June 2024, and to ultimately account for 10% of the index, reflecting the growing importance of India’s bond market. This will offer investors potential diversification benefits*, particularly as the country’s bond market is the second largest among emerging markets.1 By 2031, India is forecast to account for a fifth of the growth in the global working-age population.2 This poses the question of whether we might see India overtaking China as the driver of global growth.


Female CEOs remain disappointingly few and far between. In 2023 the number of female FTSE 100 CEOs rose to nine; in 2024 double digits should be achievable. However, we should aim higher – surely at least surpassing the number of FTSE 100 CEOs named Andy or Peter (13!). LGIM strives for equality, and continues to use its shareholder votes to drive change and improve boardroom diversity around the globe. And, of course, we have our own inspirational female CEO and CIO.

countdown-blog-8.pngAI was the hot equity theme of 2023. Here’s what the tech-cognoscenti will be watching in 2024, according to the Gartner Hype cycle:

  • Neuro-symbolic AI (me neither…)
  • AI TRiSM (tackling trust, risk and security)
  • Casual AI (not what you might think)
  • Responsible AI (it recycles?)
  • Data-centric AI (handy if playing countdown)
  • First-principles AI (tackling complex problems by breaking them down into smaller parts. Also known as common sense to your grandpa)

But beware of EdgeAI (decentralised AI) and AI maker-and-teaching kits (child’s play) – according to Gartner they are heading towards the trough of disillusionment.

countdown-blog-7.pngBehold the ‘Magnificent 7’: Apple**, Amazon**, Alphabet**, Meta**, Microsoft**, Nvidia** and Tesla**. They’ve been performing financial acrobatics, and thanks to the AI craze, Nvidia, Tesla and Meta pulled off highly impressive stunts with gains of 240%, 105% and 175% respectively.3 Their combined weight in the S&P 500 went from 20% to 28% over the course of 2023.4 On the one hand this gifted many investors significant gains, but on the other hand it created a potentially overlooked source of concentration risk in portfolios.

countdown-blog-6.pngFrom January 2024 the group of Brazil, Russia, India, China and South Africa (known as the BRICS) will be joined by six more countries: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE. It’ll certainly be challenging to come up with a new acronym. Anagram solvers suggest SUBSEA-ICIER or IBICES-ARE-US. Instead, they’ve opted for BRICS+. The group’s expansion reflects a shift towards a multi-polar world, one not dominated by wealthy liberal democracies, and one in which the “global south” will have a growing voice.

countdown-blog-5.pngPoked and prodded by persistently elevated inflation and expectations of ‘higher-for-longer’ central bank interest rates, the usually sleepy US bond market roared back to life this year. The yield on 10-year US treasuries rocketed to touch 5%, their highest level in more than a decade. The speed and magnitude of this move left many investors nursing losses and even triggered the collapse of several US regional banks. While US regulators stepped in to stabilise the US financial system and head off contagion risks, it seems that, for now at least, the era of zero percent bond yields is behind us.

countdown-blog-4.pngChina had a bumpy 2023, buoyed by the end of incessant lockdowns, but bedraggled by property-sector stress. With the post-COVID-19 rebound having run its course, and deleveraging among developers a deed half-done, we are pessimistic about China’s 2024 growth prospects, forecasting GDP growth of only 4%. While authorities are watchful for financial contagion, reckoning with entrenched imbalances is tricky (as Japan found after its real estate boom) and will likely weaken Chinese growth for some time. Financial aid and broader macro stimulus can offer some relief, but China’s bumpy ride isn’t set to end in 2024, in our view.

countdown-blog-3.pngIn the European capital, ‘jamais deux sans trois’, as they say – never two without three. Paris gears up to host the Summer Olympic Games for the third time in 2024, joining London as the only city to achieve this feat. Expect daring dives from swimmers, swift serves from tennis players, and defensive plays as close as a Parisian parking spot against formidable opponents. Invoking the sporting spirit, the Asset Allocation team has also assumed a defensive stance, favouring long positions in European defensive assets over cyclicals, foreseeing a challenging scenario amid expectations of a shallow recession.

countdown-blog-2.pngThe countdown is on for the 2024 US presidential election, a battle that looks set to be a rematch between former President Donald Trump and incumbent President Joe Biden. If they do end up as their parties’ nominees, both candidates have their fair share of headwinds to face if they are to earn a second shot as commander-in-chief. Trump is currently trudging his way through the 91 criminal counts laid against him, including both federal and state charges. Biden is navigating the US response to the conflict in Gaza amid the existing Ukraine conflict, which so far appears to be weighing on his already weak poll numbers.

countdown-blog-1.pngIn the climate crisis countdown, a ray of hope shines from China. New research indicates that China’s carbon emissions might peak this year, sparking a countdown to a structural decline from 2024 onwards. Despite a post-COVID-19 fossil fuel rebound that attempted to steal the spotlight, China defied expectations with a spectacular surge in clean energy investments, outpacing government targets with solar power alone soaring by 210 gigawatts in 2023,5 kicking off a celebration for a historic period of declining emissions.

*It should be noted that diversification is no guarantee against a loss in a declining market.

**For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security.


1. LGIM and JPMorgan data as at 31 Aug 2023.

2. Bloomberg as at December 2022.

3. Bloomberg as at 22 November.

4. Bloomberg as at 31 October.

5. https://www.carbonbrief.org/analysis-chinas-emissions-set-to-fall-in-2024-after-record-growth-in-clean-energy/ 

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 in the noise of the Emirates, and she also enjoys playing netball and swimming. Living in London, you'll either find her visiting the farmers market on weekends or at the football. She hopes you enjoy her thoughts on all things investment related, and if you’re a Tottenham fan, she hopes you’ll change your mind!

Isabella Hughes

Rebecca Burgess

Investment Specialist, Asset Allocation

Becky is an investment specialist in the team focusing on institutional clients. Although she appears very serious at first, those who get to know her quickly find out she's into anything and everything 'boujie'. Becky is also a self-confessed chocoholic whilst balancing this out with playing netball, which fuels her competitive streak. People new to Becky may expect a frosty reception, but perhaps this can be put down more to her passion for ice skating during the winter season?

Rebecca Burgess