2024 investment performance, and a look into the year ahead
2024 was a good year for investors, with financial markets delivering strong returns for the second year in a row.
2024 we talked about Artificial Intelligence and technology as the theme driving markets to new highs, and looking back, AI was definitely the star of the show, delivering huge gains for companies like NVIDIA, Microsoft, Alphabet (Google) and Meta platforms leading the AI revolution.
Among other big factors influencing markets in the last 12 months were interest rates, particularly in the United States where a rotation to lower interest rates resulted in investors looking to put more money into share markets seeking returns.
While we continue to remain cautious on valuations – we don’t want to overpay and risk owning risky investment – our funds participated in the strong markets, beating performance objectives over the period, positioning us well for long term returns.
We see tech and AI as an important theme driving markets again in 2025, but we don’t expect it to be ‘more of the same’. Markets are dynamic and there’s always curveballs to contend with.
Investment experts will say many AI stocks are “priced to perfection”, which essentially means that all the expectation for the future growth of these companies is already reflected in the stock prices, and it’s now up to the businesses to deliver on their promises, or risk disappointing investors.
We also expect the focus of investors in AI to shift this year, from the foundational chip and cloud companies that were the big winners in 2024, to platforms and applications that will play a bigger role in peoples’ everyday lives, from productivity tools at work, to healthcare and customer experiences. Things will definitely get interesting this year!
Australian Ethical super option performance vs. target returns
| 1 year (%) | 7 years (%) | 10 years (%) | |
|---|---|---|---|
|
Australian Ethical Balanced Accumulation option Target: Consumer Price Index +3.25% |
11
|
6.8
|
6.9
|
|
Australian Ethical High Growth Accumulation option Target: Consumer Price Index + 4.25% |
15.2
|
8.6
|
8.4
|
|
Australian Ethical Australian Shares Accumulation option Target: ASX300 Total Return Index |
15
|
8.8
|
10
|
|
Australian Ethical International Shares Accumulation option Target: MSCI World Index ex Australia |
25.1
|
11.1
|
10.3
|
*Option returns are net of fees and tax. CPI benchmarks are gross. Returns are for the periods outlined to the end of December 31 2024. Past performance is not a reliable indicator of future performance.
See performance for all super optionsA big feature for Australian Ethical during the year was our investments in private market companies – companies not listed on public stock exchanges. These kinds of investments help us to diversify our portfolios away from public market risk while influencing progress towards a better future for people, planet and animals by being aligned to our Ethical Charter. Among the new investments are 50 Quay Street, a build-to-rent development in Brisbane, a Melbourne based recycler, Repurpose It, and a sustainably powered Data Centre in the United States, Aligned Data Centres. Stay tuned for more stories about these new investments.
We’re also chuffed to share this year investment researcher Zenith upgraded the rating on our multisector funds to ‘Recommended’, a great validation of the investment team and process that sits behind our superannuation options.
Image: Architectural rendering of 50 Quay St development.
Australian Ethical Investment Ltd (ABN 47 003 188 930, AFSL 229949) is the Responsible Entity of the Australian Ethical managed funds. Interests in the Australian Ethical Retail Superannuation Fund (ABN 49 633 667 743, USI AET0100AU) are offered by Australian Ethical Investment Ltd (ABN 47 003 188 930, AFSL 229949) and issued by the Trustee of the Fund, Australian Ethical Superannuation Pty Ltd (ABN 43 079 259 733, RSE L0001441, AFSL 526 055).
The information is of a general nature and is not intended to provide you with financial advice or take into account your personal objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances and read the Financial Services Guide, relevant product disclosure statement (PDS) and Target Market Determination (TMD) available on our website.
You may wish to seek financial advice from an authorised financial adviser before making an investment decision. Past performance is not a reliable indicator of future performance.
Past performance is not a reliable indicator of future performance.
Ratings or investment returns are only one factor you should consider when deciding how to invest. Remember, superannuation is generally a long-term investment. For details on the risks and fees of investing in Australian Ethical Super, please refer to the Financial Services Guide and Product Disclosure Statements on australianethical.com.au
Investing ethically and sustainably means that the investment universe will generally be more limited than non-ethical, non-sustainable portfolios in similar asset classes. This means that the portfolio(s) may not have exposure to specific assets which over or underperform over the investment cycle, and so the returns and volatility of the portfolio(s) may be higher or lower than non-ethical, non-sustainable portfolios over all investment time frames.
Interests in the Australian Ethical Retail Superannuation Fund (ABN 49 633 667 743, USI AET0100AU) are offered by Australian Ethical Investment Limited (ABN 47 003 188 930, AFSL 229949) and issued by the Trustee of the Fund, Australian Ethical Superannuation Pty Limited (ABN 43 079 259 733, RSE L0001441, ASFL 526 055).
