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 final quarter of 2024 was a mixed bag with many market indexes ending the year on a sour note as the uncertainty of a second Trump presidency took hold.
Canadian stocks were mixed in the fourth quarter, the S&P/TSX Composite Index gained +3.8%, and finished 2024 at +21.7%. The S&P/TSX Small Cap was flat in Q4 at +0.1%, and +16.0% for the year. The US stock market indexes were more muted than they have been all year; the S&P500 gained +2.4% in the fourth quarter (+25.0% for 2024). The tech heavy Nasdaq Composite Index had a good quarter, gaining +6.2% (+28.6% for 2024), while the small cap Russell 2000 Index was flat for the quarter and finished 2024 at +10.0%.
EAFE stocks (Europe, Australasia, and Far East) finished the year at +8.4%, after losing -0.90% in the fourth quarter. European stocks had a very underwhelming 2024, gaining only +4.9%. Japan’s Nikkei 225 started the year well, gaining +20% in the first quarter but went to sleep after that, and finished the year at +16.2%. Emerging market stocks had a difficult quarter with the MSCI Emerging Markets Index losing -4.6%, the index finished the year at +10.5%.
While the Bank of Canada cut interest rates by 0.50% at the October and December meetings, fixed income markets reacted poorly to finish 2024. The FTSE Canada Universe Bond Index was flat for the quarter and finished 2024 at +4.2%, while the FTSE Canada Short Term Bond Index was up +0.6% for the quarter (+5.7% for 2024). US fixed income was weak after the US Federal Reserve slowed the pace of interest rate cuts and only cut 0.25% at their October and December meetings. The Bank of America (BoA) indexes were weak in Q4: -4.9% for the ICE BoA AAA Corporate Index (-0.8% for 2024) and -2.5% for the ICE BoA BBB Corporate Index (+3.6% for 2024). The riskier high yield indexes performed better: the ICE BoA CCC Corporate Index was up +2.5% (18.2% for 2024) and +0.2% for the US High Yield Master II (+8.2% for 2024).
Real Estate Investment Trusts (REITs) did not respond well to the larger interest rate cuts and had a very difficult fourth quarter. The S&P/TSX Capped REIT Index gained lost -14.7% (their fifth worst quarter since 1998), wiping out all of the positive performance from earlier in the year, finishing 2024 down -2.0%.
Oil finished the year roughly where it started; oil gained +5.2% for the fourth quarter and +0.1% for 2024. The diversified Bloomberg Commodities Index was down -1.4% in Q4 as losses on other commodities offset the rise in oil prices. It also finished the year up +0.1%.
Portfolio Performance
Performance of the ModernAdvisor portfolios was positive decent performance from equities offset declines in fixed income.
The high interest savings portfolio returned +0.9% in Q4 and +4.4% for 2024.
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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