- Global markets rallied in 2023, with MSCI ACWI returning 20.4% for the full year. Much of the gains were driven by large-cap US technology stocks dubbed the “Magnificent Seven”.
- Technology funds dominated the best performing funds list on Endowus Fund Smart in 2023, while China focused funds were the worst performing.
- It’s difficult to predict where the markets will go next. Instead of attempting to guess the best performing funds year on year, what’s important is to stay invested, disciplined and diversified.
- Click here to get started on your wealth journey with Endowus Hong Kong today.
2023 in review: The bull in the bear
What a difference a year can make.
A year ago, the Fed was still head on fighting skyrocketing inflation with its most aggressive rate hiking cycle since the 1970s. Many feared the US might be forced into a recession, as we saw a string of bank failures from Silicon Valley Bank to Credit Suisse in the first half of 2023.
However, global markets defied many of such bearish expectations. The MSCI All Country World Index (MSCI ACWI) ended the year rallying 22.8%. Majority of the gains were driven by large-cap US technology companies dubbed the “Magnificent Seven”, which saw the Nasdaq 100 soaring 55.1% in 2023, after a decline of 32.4% in 2022.
Bonds also rallied in Q4 as the Fed signalled we might finally be approaching the end of the rate hike cycle, with Barclays Global Aggregate Index ending the year returning 7.2%.
On the other hand, many who had expected the Chinese equity markets to rebound as it came out of a post-Covid lockdown recovery were disappointed. The CSI 300 Index ended the year with an unprecedented third straight annual loss of 9.2%.
As a result, it is no surprise that technology funds dominated the list of best performing funds on Endowus Fund Smart in 2023, while China focused funds were the worst performing.
Here’s the a closer look at the list:
Best performing funds of 2023
Worst performing funds of 2023
Most popular funds on Endowus Fund Smart
For those interested to learn about the most popular fund choices on Endowus Fund Smart. Here’s a look at the top 3 funds that were the most in-demand* among investors the various categories across equities, fixed income, cash management, and more.
Equities
Fixed Income
Cash management
Others — multi-asset, thematic, and more
*Note: The most popular funds were determined based on the net inflows on Endowus Fund Smart in the one-year period between 1 Jan 2023 and 31 Dec 2023. This analysis excludes in/outflows through the Endowus model portfolios, and only includes retail funds available on Endowus Hong Kong.
Where are markets headed in 2024?
It’s difficult to predict where the market will go next. We are already hearing some predicting the Magnificent Seven might still have room to go, while others once again expect “the worst might be over” for China markets.
As highlighted in the review of 2023, probably very few expected the strong performance of the global equity markets at the beginning of the year. Those who sat on cash were also surprised to have missed out on this strong rally.
What’s important is to stay invested, disciplined and diversified. The market has historically rewarded long-term investors who maintain a disciplined and diversified portfolio, which takes advantage of outperformance in one sector and cushions underperformance in another.
As we start off the new year, some might be tempted to guess the top or worst performing funds for 2024 already. Instead of getting into this annual guessing routine, let’s start the new year with a scientific and evidence-based investing approach that is based on concepts of diversification, compounding and asset allocation.
Customise your portfolios in minutes with Endowus Fund Smart
On Endowus Fund Smart, you can create your own diversified, resilient investment portfolios with 200+ Best-In-Class funds selected by our Investment Office. Browse our complete fund list here.
These funds are selected by applying a strict, institutional-grade screening process that is rigorous, thorough, and continuous — we call this proprietary framework SMART+.
We also offer a broad selection of institutional-grade PI-only mutual funds, hedge funds and private markets across private equity, private credit, absolute return multi-strategy hedge funds.
If you wish to verify as a Professional Investor to access these funds, please contact support.hk@endowus.com.
As your conflict-free financial advisor, Endowus remains committed to doing what is always in the best interest of our clients, and to help you achieve better investing outcomes.
Click here to get started on your wealth journey with Endowus Hong Kong today. Here’s to a strong start to 2024.
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Investment involves risk. Past performance is not an indicator nor a guarantee of future performance or returns. Projected performance or returns is not guaranteed to materialise. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested.
Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund.
General risk warnings relating to collective investment schemes
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Complex Products
Some of the funds contained in this article are complex products and investors should exercise caution when investing in these products. Though these products have been authorised by the SFC, authorization does not imply official recommendation. SFC authorization is not a recommendation or endorsement of a product nor does it guarantee the commercial merits of a product or its performance.
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