Quarterly Market Overview - Q4 2024

Commodities Fared Best; Equities Struggled

Asset Class Returns

Major Asset Class Returns for the Three Months Ending December 31, 2024

• Major asset classes were mixed in the fourth quarter of 2024. Domestic equities were marginally positive; non-U.S. equities declined sharply; Fixed Income was lower and Commodities were positive.

• U.S. Large Cap stocks were the only equities to make any real gains. Mid & Small Caps were barely positive. Developed markets outside of the U.S. fared the worst among major asset classes. International Developed equities lost 9.59% in the quarter. Emerging Markets were slightly less negative with a 8.81% decline.

• Persistently high interest rates (see below) pressured Fixed Income and Real Estate, while Commodities rose, on average.

  
  

The table below depicts the same information as above and shows which representative security is used for each asset class.

Source: Jackson Creek Investment Advisors; S&P Global

Major Asset Class Returns for the Twelve (12) Months Ending December 31, 2024

• U.S. Large Cap equities had the best performance over the 2024 calendar year. U.S. Large Cap beat the next best asset class (U.S. Mid Cap +14.3%) by almost 10 percentage points.

• U.S. Small Cap equities rounded out the top three with a 10.7% annual return.

• Physical asset classes - Real Estate and Commodities - each had positive years, rising 6.7% and 8.5%, respectively.

• Fixed Income posted a negative year as interest rates rose.

U.S. Index Returns with Growth & Value Styles

• Growth outperformed Value within each capitalization range. The outperformance gap was over 9.0% in the Large Cap universe and +9.8% among Mid Caps.

• Small Cap style indices were less pronounced as the Core index only rose 0.3%.

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Interest Rates

U.S. Treasury Yield Curves

• The yield curve made a strong move higher at the mid-to-longer end of the term spectrum. The Treasury curve has mostly normalized.

• The 10YR yield ended the year at 4.58%. This is 77 basis points higher than the end of September.

• The positive 2Y/10Y spread expanded from last quarter.

• The 2Y/10Y spread was -0.35% at the end of 2023 and was +0.33% as of the end of 2024.

Disclaimer - this is not to be construed as investment advice or a recommendation to buy or sell any security. This is not meant to be indicative of any specific portfolio returns. Please see full disclosure on main blog page.