• Overview

    Welcome to the fifth edition of our annual investment publication, Agenda 2024. This publication is compiled by our investment team headed by our Chief Investment Officer, Tracey McNaughton.

    The futility of writing an annual outlook does not escape us.

    We don’t really know what is going to happen in the coming twelve months – nobody does. The past four years have featured unforecastable events that have been central to the performance of financial markets. The outbreak of coronavirus in 2020; the early COVID-19 vaccine discovery in 2021; the fragility of global supply chains in 2022; and the resilience of Western consumers in 2023.

    It is with this mindset that we say, anything is possible in 2024.

  • Global Growth

    Growth is expected to slow in 2024 as unemployment rises and consumers pull back. Liquidity will continue to contract as major central banks shrink balance sheets further and interest rates, while lower, remain above neutral.

  • Inflation

    Inflation is expected to continue its downward trend on fading energy pressure and weaker labour markets and as the delivered monetary tightening starts to weigh on the growth outlook.

  • Interest Rates

    The fastest and most synchronised developed market central bank tightening cycle of 2022–23 will begin to reverse in the first half of 2024 against a backdrop of muted growth and falling inflation.

  • Fiscal Policy

    Fiscal policy should be slightly contractionary in 2024, reflecting a bit of belt-tightening on the spending side partly offset by higher interest outlays on government debt.

  • Bond Yields

    We look for lower yields and steeper curves in 2024. Australian bonds are more attractive than their global peers given the greater risk of recession in Australia.

  • Equities

    2024 looks like a year of slowing nominal GDP growth as inflation recedes. Reasonable earnings growth and single-digit returns are expected. Investment flows into and out of the asset class will create volatility.

  • Currencies

    The year ahead for the U.S. dollar is likely to remain bumpy but elevated. Heightened geopolitical risk will be a key support. If rate cuts are realised, the dollar would still yield more than 56% of global currencies on a real basis.

  • Alternatives

    Alternatives offer the best risk-adjusted return for investors in 2024. Investment flows will be more moderate creating a more stable backdrop
    for investors. Deal flow and fundraising environment will remain challenging. Our preference remains for private debt in a soft-landing scenario.

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