Fund Return 2023-2024
Fund return to 31 January 2024
Scheme Year to Date
CERS Multi Asset
CERS Bond Fund
CERS Cash Fund
CERS Equity Fund
CERS Property Fund
Returns to 31.05.2023
Please click here to see a graphical illustration of funds to 31.05.2023
Provided by Mercer - CERS Investment Adviser
started the year with positive global equity and negative global fixed income
returns. In January, US equities outperformed international developed and
emerging market equities. Growth outperformed value as the prospects of the AI
roll-out remained an important narrative. Positive US equity returns were
helped by continued economic resilience. US GDP growth was higher-than-expected
for Q4 2023. An additional tailwind was the prospect of Fed rate cuts in 2024
as inflation is expected to continue its downward trajectory this year. It is
worth noting that the S&P 500 hit a new all-time high, fully recovering
from its 2022 drawdown. Yields on the longer end of the curve shifted higher, causing
losses for fixed income. Both investment grade and high yield spreads remain
near 52-week lows. Outside of the US, major central banks remained on hold and
maintained cautious rhetoric. China continues to incrementally support its
economy, as economic data remains weak. Its stock market was one of the worst
performers this month.
forward-looking composite purchasing manager indexes (PMI) remained in
expansionary territory in much of the developed world, although the Eurozone
continued to remain in contractionary territory. Preliminary estimates showed a
notable spike in US PMI as manufacturing returned to expansionary territory and
the service PMI hit a 7-month high. Growth continues to be led by the service
sector in developed markets. Consumer confidence in the US reached its highest
level since July 2021 as consumers’ inflation expectations for the year ahead
further decreased. While China’s PMI remains in expansionary territory, fears
surrounding its largest real estate developer, Evergrande, intensified as a
court ruled it must be liquidated.
headline inflation increased to 3.4% year-over-year, higher than market
expectations of 3.2%. Core inflation decreased to 3.9% but also came in above
market expectations. Inflation in the UK and Eurozone increased after reaching
two-year lows in the previous month. Inflation in Japan fell to its lowest point
since July 2022. China continued experiencing deflation for the third
consecutive month, the longest stretch since 2009. Major central banks kept
interest rates unchanged. In the US, market expectations for rate cuts in March
have evaporated, although the market continues to price more rate cuts for 2024
than what the Fed previously signaled. Outside of the US, major central banks
reaffirmed their cautious stance.
the geopolitical front, the conflicts in the Middle East continued to escalate.
The market impact from these events was limited. Oil rose 8% from a low base,
but that appeared to be driven by supply disruption due to US winter weather
and investors anticipating more economic resilience than expected.
US dollar strengthened against most major developed and emerging market
currencies in January. Gold declined during the month as real yields trended
up. REITs underperformed broader equities due to their higher interest rate
sensitivity. Commodities and natural resources equities had a weak start to the
year despite oil prices increasing.
economic growth proved remarkably resilient in 2023 and investors are now
hoping that easier monetary policy will continue to serve as a tailwind in in
2024, offsetting less expansionary fiscal policy and potentially lower consumer
spending. We expect the US economic growth to slow in 2024, but to avoid a hard
landing, especially following the Fed’s latest comments. Economic activity in
the UK and Eurozone remained slow in Q4. China’s economy continued to struggle
and entered deflation in the fourth quarter but seemed to be touching its
bottom with targeted stimulus measures to support the housing market
inflation has fallen significantly. Headline CPI was 3.4% year-over-year
through December, while core CPI came in at 3.9%, an over two-year low.
Inflation is expected to decline further as remaining inflationary components
such as shelter roll over. Labor markets have shown signs of softening from
tight levels, which also should help inflation fall back to target.
rates ending the year in restrictive territory, central banks are now openly
signalling an end to the hiking cycle. Markets have priced in several rate cuts
in the US for the year, starting as early as March while the Federal Reserve’s
own rate projections indicate lower rates by the end of 2024. Others such as
the European Central and Bank of England remain more cautious while the Bank of
Japan, which had kept rates near all-time lows despite rising inflation, has
entertained the possibility that it will not enter a hiking cycle.
Our outlook for global equities has improved
from a macro and policy standpoint but high US equity valuations remain a
concern after strong quarterly returns. We believe the rally in Treasuries has
brought yields out of the extremely attractive territory reached in September.
For the whole of 2023, US yields rose marginally.
Scheme Year to date performance is the period from 1 June 2023 to the most recent month shown.
- 1 Year performance is the cumulative performance of the last 12 months to the most recent month shown.
- Multi Asset Fund performance assumes no lifestyling.
- Performance shown is net of annual management charge.
- The investment choices offered by the Trustee will be regularly reviewed and may be varied from time to time.
Before you choose a fund we recommend that you speak to a financial adviser. The CERS Trustee preferred financial adviser is Milestone Advisory DAC. You can contact them or your own financial adviser to assist you to review your investment choices. You can contact Milestone Advisory DAC via the website (www.milestoneadvisory.ie), by post: Linden House, 4 Clonskeagh Square, Clonskeagh Road, Dublin 14, D14 FH90, by email (email@example.com), or by phone (01) 406 8020. Milestone Advisory DAC t/a Milestone Advisory is regulated by the Central Bank of Ireland.
If you require further information please contact the CERS Team at firstname.lastname@example.org