- Over 40% of the global population eligible to vote in 2024.
- With this backdrop, Aegon research sheds light on what advisers predict will be asset class winners and losers in 2024.
- US equities (49% of advisers) comes out on top despite valuations being at levels not seen since the dot.com and post-Covid era.
- Following closely behind are UK equities (44%) and emerging market equities (41%).
- On the other hand, 60% of advisers expect commercial property to perform the least favourably, with cash (36%) and gilts (28%) completing the top three worst return prediction positions.
Asset class winners
2024 is a pivotal year for global elections, with over 40% of the world’s population potentially having the opportunity to vote. Against this politically charged backdrop, 49% of advisers selected US equities as the asset class poised to provide the most significant returns for clients in 2024. Following closely behind is UK equities (44%) and emerging market equities (41%).
And losers
On the other end of the table, 60% of advisers cited commercial property as the asset class that they expect to be the worst-performing in 2024. Only 2% of advisers said they expect this asset class to generate the best returns for clients. The top three worst-performing predictions closed with cash (36%) coming in second and gilts (28%) coming in third.
Anthony McDonald, Head of Portfolio Management at Aegon, said:
“After outperforming for each of the last five years and being at the centre of the technology and AI revolution, US equities seem unstoppable at first sight, and it seems reasonable to expect them to continue leading the market. However, on long-term valuation measures they are now expensive, trading at levels only previously seen in the dotcom and post-pandemic bubbles. This feels unsustainable, and it is a key reason why we’re underweight in US equities.
“In contrast, UK equities look more reasonably valued. We’re particularly positive on smaller companies, which tend to be more sensitive to the domestic economy. Despite facing stagnant growth over the past 18 months, which tipped into a hopefully short recession in late 2023, we believe the economic and market outlook for the UK may be overly pessimistic. The 41% of advisers favouring UK equities for top returns in 2024 could be right to sense that even a modest recovery could boost a market that seems to reflect low investor expectations.
“Undervalued asset classes such as emerging market equities also have the potential to have their time in the sun should political and policy changes influence markets.
“Conversely, high interest rates are likely to be a headwind and structural post-pandemic changes to our working and consumption habits also represent challenges to established sectors, as well as opportunities elsewhere.
“In the wake of ongoing market volatility, and with 2024 set to be a year of political change, it’s no surprise that advisers hold varying opinions on the best investment approach. But in uncertain times like these, expert input with a continued focus on diversification and long-term investment fundamentals is key when building client portfolios.”
References
- Research carried out by Opinium on behalf of Aegon amongst 200 UK financial advisers, 8 to 15 January 2024. Further details are available upon request.
About Aegon
In the UK, Aegon offers pension and investment solutions to over 4 million customers. Aegon employs over 2,000 people in the UK and together with around 600 people employed by Atos, we serve the needs of our customers. Figures correct as at 31/12/2022. More information on aegon.co.uk
Aegon UK is part of the wider Aegon Group, based in the Netherlands, whose roots go back to the first half of the nineteenth century. Aegon is an international financial services holding company. Aegon’s ambition is to build leading businesses that offer their customers investment, protection and retirement solutions. Its portfolio of businesses includes fully owned subsidiaries in the US, UK and a global asset manager. In addition, Aegon has partnerships in Spain & Portugal, Brazil, and China, which create value by combining strong local partners with Aegon’s international expertise. In the Netherlands, Aegon generates value via a strategic shareholding in a market leading insurance and pensions company.
Aegon's purpose of helping people live their best lives runs through all its activities. As a leading global investor and employer, Aegon seeks to have a positive impact by addressing critical environmental and societal issues, with a focus on climate change and inclusion & diversity. Aegon is headquartered in The Hague, the Netherlands, and listed on Euronext Amsterdam and the New York Stock Exchange. More information can be found at aegon.com
The information in this press release is intended solely for journalists and shouldn’t be relied upon by any other persons to make financial decisions.