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Fund research

Global fund sector review – inflation is still a problem, but what’s next?

Inflation slowed and fell, but proved stickier than expected meaning rate cuts aren’t expected as soon as they were. What does this mean for global stock markets and how have our Wealth Shortlist funds performed?
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Important information - This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Inflation is always a concern for economies, but more so recently. It rose significantly in 2021 and 2022, peaking at 11.1% in the UK. Over in the US it reached 9.1%, in Europe, 10.6%.

Even Japan’s prices are rising for the first time in almost a decade.

In turn, central banks started hiking interest rates to combat rising prices.

At first this was working well. Consumers were encouraged to save money instead of going out and spending it, businesses stopped expanding and inflation started falling.

The consequence though is that growth can be adversely affected.

In 2024, it's expected the UK and Europe will both grow less than 0.5%, while the US will grow just over 2%.

When inflation looked to be tamed and growth slowed, expectations of rate cuts grew. But inflation is still sticky. It might be well below its peaks, but central banks won’t rest until it’s consistently below their targets. And this is proving a problem.

US inflation bottomed at 3% back in June 2023, but in March 2024 inflation came in at 3.5%. The US job market and consumer spending has stayed strong, keeping inflation higher.

UK inflation came in at 3.2% in the 12 months to March, a slight fall after a few months of hovering around 4%. Europe is a similar story, where March’s numbers came in at 2.4%. This is the same as it was in November 2023. Inflation in Japan was 2.8% in February after being 2.2% in January.

It was always suspected that inflation would fall rapidly in the early months thanks to the combination of higher interest rates and falling oil and energy prices. It was also likely that inflation would become stickier the further it fell.

These suspicions looked to be right.

The next question is what it will take for inflation to meet central banks targets. Do rates need to increase or is the current level enough?

What we do know is the talks of early rate cuts are pretty much gone. The expectations for interest rate cuts this year have fallen a lot. Markets were expecting six US rate cuts this year, now they’re expecting two.

India goes from strength to strength.

India saw exceptional growth in 2023 and expectations for growth in 2024 also look strong.

India’s population grew to be the biggest in the world in 2023. They’ve benefited from growing urbanisation and global offshoring, leading to low unemployment and high consumer spending.

The Indian government has also taken steps to encourage consumer spending and help with rising inflation. President Modi put in several measures to help limit food inflation. He also increased government spending on infrastructure and incentivised the manufacturing of electronics and semiconductors to help them compete globally.

This has led to strong stock market returns but, there’s no guarantee that this will go on.

How have global stock markets performed?

Global stock markets have seen positive results over the 12 months to the end of March. Over the past year, the broader global stock market has risen 21.18%*. As always though, past performance isn’t a guide to future returns.

The Indian stock market performed the best over the last 12 months, returning 34.43%. It’s seen rapid growth over the last year and retained the title for the world’s fastest growing economy.

In the last three months of 2023 the country expanded 8.4% compared to the previous year.

The Chinese stock market was the worst-performing stock market returning -18.66%. The Chinese market is still struggling with a range of issues that are keeping investors cautious.

China’s battling weak consumer confidence which is leading consumers to spend less and save more. They also have issues in the property market where demand has fallen, causing some of the world’s biggest property developers to default or head to default.

The Chinese government have taken various measures to try and stimulate growth, but so far unsuccessfully.

President Xi appears to be at a crossroads of pro-business stimulus to help push the economy forward, but possibly having to roll back some of the party’s previous policies.

From a sector level, the technology sector performed the best over the last 12 months, returning 37.90%. It’s benefited from advancements in artificial intelligence (AI) and the opportunities it might create. Consumer staple stocks lagged the wider market, returning just 0.28%.

One-year stock market performance

Past performance isn’t a guide to future returns.
Source: *Lipper IM, to 31/03/2024.

How have our Wealth Shortlist funds performed?

Global funds on the Wealth Shortlist delivered mixed performance over the past year, some faring better than others.

During 2022, funds investing in companies undergoing a turnaround or those focused on paying a dividend, otherwise known as ‘value’ focused funds, generally performed better.

But in 2023 the market rotated and those investing in companies capable of above-average earnings growth (or ‘growth’ funds) typically performed better. Companies that were deemed to be beneficiaries of advancements in AI performed very strongly over the year.

2024 so far has seen a mix of growth and value stocks doing well. This tends to be seen as good news for stock pickers looking to find the best opportunities they can.

A year is a short time to assess the skills of a fund manager though. Managers with different strengths, styles and areas of focus will perform differently over time.

Investing in funds isn't right for everyone. Investors should only invest if the fund's objectives are aligned with their own, and there's a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest, and make sure any new investment forms part of a long-term diversified portfolio.

Remember, this article isn’t personal advice. All investments rise and fall in value, so you could get back less than you invest. If you're not sure if an investment is right for you, ask for financial advice.

For more details on each fund and its risks, please see the links to their factsheets and key investor information below.

Artemis Global Income

Artemis Global Income has been the best-performing fund in the global sector of the Wealth Shortlist over the past 12 months.

The fund, managed by experienced investor Jacob de Tusch-Lec, returned 30.30%* versus 16.36% for the IA Global Sector. Remember, past performance isn’t a guide to future returns.

We like de Tusch-Lec’s contrarian approach to investing, however it can lead the fund to being invested very differently to peers.

Our analysis suggests de Tusch-Lec’s stock selection has been the main driver of returns over the past 12 months. In particular, selections in Europe and Japan, as well as investments in industrials and financials, have all benefited the fund’s performance. The fund can invest in smaller companies as well as emerging markets which can increase risk. The manager can also use derivatives which can also increase risk.

Troy Trojan Global Income

The Troy Trojan Global Income fund was the weakest performing fund in the global sector of the Wealth Shortlist returning 5.32% over the past 12 months.

James Harries, who manages the fund, has a stellar long-term record in protecting investors’ money. Harries' focus on high-quality companies and a more conservative investment approach means we expect the fund to hold up relatively well when markets fall.

In contrast, we expect the fund to lag the peer group when markets rise quickly. This has been the case more recently with markets rallying, particularly in the US and in the technology sector.

We still rate the team’s disciplined investment approach – it’s been used across a range of funds over the years with good outcomes. The fund can invest in emerging markets which can add risk as well as use derivatives. The fund also can be concentrated meaning fewer stocks can have a greater impact on performance.

Annual performance growth

31/03/2019 To 31/03/2020

31/03/2020 To 31/03/2021

31/03/2021 To 31/03/2022

31/03/2022 To 31/03/2023

31/03/2023 To 31/03/2024

Artemis Global Income






Troy Trojan Global Income






IA Global












Past performance isn't a guide to future returns.
Source: *Lipper IM to 31/03/2024
Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.
Written by
Aidan Moyle
Aidan Moyle
Investment Analyst

Aidan joined the Fund Research team in 2022 and is responsible for analysing funds and investment trusts in the US and Global Sectors. He has a keen interest in macroeconomics and in particular US monetary policies and the impact it can have on clients' investments.

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Article history
Published: 23rd April 2024