Market Update
All index returns are total return (includes reinvestment of dividends) and are in Canadian Dollars unless noted. Sources: *Sources: MSCI, FTSE, TMX, S&P
The second quarter of 2024 was a mixed one, most equity market indexes were positive, with some exceptions.
Canadian stocks were mostly down for the quarter, with the S&P/TSX Composite Index losing -0.5% for the quarter, but up +6.1% for 2024 so far. The S&P/TSX Small Cap Index performed a little better, gaining +0.2% for the quarter. The US stock market indexes continued to surge higher; the S&P500 gained +4.3% in the second quarter (+15.3% for 2024). The tech heavy Nasdaq Composite Index gained +8.3% for the quarter (+18.1% for 2024), while the small cap Russell 2000 Index was down -3.6% (+1.0% for 2024).
EAFE stocks (Europe, Australasia, and Far East) were flat for the second quarter, but the MSCI EAFE Index up +9.1% for the first half of 2024. European stocks were a little weaker than EAFE overall (losing -0.5%) while Japan’s Nikkei 225 lost -1.5% (+18.3% for 2024). Emerging market stocks were one of the better performers, with the MSCI Emerging Market Index gaining +5.3% in the 2nd quarter (+9.6% for 2024). Despite being a screaming bargain, many investors continue to overlook their potential, maybe the analysts will be right in 2024.
With the Bank of Canada cutting interest rates by 0.25% in June, interest rates may have finally peaked. Many analysts now believe that we will see fewer interest rate cuts in 2024 than previously expected. The FTSE Canada Universe Index gained +0.9% in the second quarter and the FTSE Canada Short Term Index was up +1.2% (+1.6% for 2024). US fixed income was a little weaker than Canadian fixed income: the Bank of America (BoA) indexes mixed in Q2: -0.8% for the ICE BoA AAA Corporate Index and 0.3% for the ICE BoA BBB Corporate Index. The riskier high yield indexes performed better, the ICE BoA CCC Corporate Index was up +0.2% and +1.1% for the US High Yield Master II.
REITs were one of the worst performers in the second quarter and for 2024 so far. The S&P/TSX Capped REIT Index lost -6.0% in the second quarter and -6.7% for 2024.
Oil was down for the quarter, losing -2.0%, while the diversified Bloomberg Commodities Index was up +1.5% as gains on other commodities offset the decline in oil prices.
Portfolio Performance
Performance of the ModernAdvisor portfolios was positive for the second quarter, with higher risk portfolios performing better, as expected with strong equity markets.
The high interest savings portfolio returned +1.2% in Q2 and +2.4% for 2024 so far.
For more details about the performance of our portfolios, visit our website or see our portfolio factsheets here.
Disclosure:
The performance figures above are a time weighted composite of all accounts being managed to the stated risk level, and include ModernAdvisor management fees plus GST/HST, where applicable. Personal portfolio performance experience may vary. All returns are stated in Canadian dollar terms unless indicated otherwise.
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