Global markets kicked off 2024 right where they left off last year…for the most part. 34 of the 47 developed and emerging markets continued their streak from last year.
That’s not to say the returns were all positive. 30 of the 34 markets added to their 2023 gains, with further gains over the last three months. 4 markets added to last year’s losses. The 13 remaining markets changed course, turning gains into losses or vice versa.
That said, three months tell us very little about how the rest of the year plays out. It tells us even less about how markets will perform in the long run. Three months are a blip on the time horizon for any long-term investor. So don’t put too much weight on returns year to date.
As noted in prior quarterly market updates, month-to-month market swings, if anything, show that returns don’t always come easy to investors. While markets have generally been uneventful this year, building on last year’s momentum, they rarely stay quiet for long. Surprises do pop up that offer investors a chance to earn those long-run returns.
Of course, the advantage of broad indexes (and index funds) is that they follow the dictum: “You don’t need to make it back the same way you lost it.” The S&P 500 and MSCI’s international index are two examples of this. Both have exceeded their pre-bear market highs even though the underlying sectors and countries (and stocks), respectively, have not all made new highs. The broader benefit of diversification means not having to guess which sector or global market will perform best each year.
A note before getting to the first-quarter highlights. The asset class, sector, international markets, and emerging market return quilts are up-to-date with the Q1 returns. Hit the links for each one.
You’ll find three tables below. A US sector, developed market, and emerging market table that breaks down the first quarter’s total returns by month. Here are a few highlights:
- The best-performing developed and emerging markets — Ireland and Peru — had a 16% return in the first quarter of 2024. The worst performers — Portugal and Egypt — were down 18% and 30% respectively.
- Real Estate was the only US sector to squeak out a loss in the first quarter of 2024. It was due to a 4.7% loss in January followed by a rally in February and March that left it shy of breaking even.
- 6 of 11 US sectors saw a loss in January. Every sector experienced gains in February and March. Overall, sector performance was more evenly distributed versus last year’s lopsided gains across three sectors.
- Of the US-based asset classes, REITs were the only one to post a loss for the quarter.
- 8 developed markets reported consecutive gains over the year’s first three months: Ireland, Netherlands, Denmark, Italy, Israel, Japan, US, and France. 3 emerging markets reported consecutive gains over the first three months: Columbia, Turkey, and India.
- Only 2 developed markets reported consecutive losses over the year’s first three months: New Zealand and Portugal. No emerging market had consecutive losing months this quarter.
- As noted earlier, not every sector has recovered from the last bear market: Consumer Discretionary, Real Estate, and Utilities have yet to break even on a total return basis.
- Communication Services, Financials, Health Care, Materials, and Consumer Staples sectors surpassed their pre-bear market highs in the first quarter of this year.
- Of the 22 developed markets, Austria, Belgium, Finland, Germany, Hong Kong, Ireland, Israel, New Zealand, Norway, Singapore, Sweden, and Switzerland have not fully recovered from the prior bear market.
- Hong Kong’s market added to its steady decline since 2021 — three losing years in a row plus further losses in the first quarter of 2024.
- China’s market is the other notable loser that added to its three-year losing streak with a first-quarter loss this year.
Related Reading:
2023: A Year in Returns
2023: Q3 Returns