Umbra’s December 2024 MPS review highlights resilience in global equities despite UK stagflation risks and rising gilt yields. The Umbra MPS range delivered strong relative performance across risk profiles, with annual returns outpacing ARC benchmarks. Equities ended the year higher, credit markets were robust, and gold surged on geopolitical risk, while bonds struggled under sticky inflation. Umbra remains focused on disciplined portfolio management to navigate a challenging policy and economic backdrop.
The UK economy closed 2024 under pressure, with GDP contracting for a second consecutive month and inflation rising to 2.6%. The Bank of England held rates steady, but gilt yields climbed as government borrowing costs increased, reflecting investor unease with fiscal policy. Business confidence remains fragile, with higher taxes and energy costs adding further headwinds.
Globally, equities delivered strong annual gains despite a weaker December. The MSCI ACWI rose +17.5% in 2024, while US growth surprised to the upside, with Q3 GDP revised to 3.1%. Japanese equities were standout performers, supported by reform momentum and a weaker yen, while UK and European markets lagged. Emerging markets were mixed, with Latin America hit hardest by fiscal concerns in Brazil.
Fixed income disappointed investors expecting 2024 to be the “year of the bond.” Global government bonds fell –2.9% as inflation proved sticky, and UK gilts dropped –3.9%. Credit markets were more resilient, with high yield returning +9.2%. Alternatives delivered mixed outcomes: gold gained +25.8% (GBP terms) on fiscal and geopolitical risk, while property and infrastructure posted modest positive returns despite late-year weakness.
The Umbra MPS range outperformed ARC benchmarks across risk profiles. Returns in 2024 ranged from around +5.7% in Defensive portfolios to +19.4% in Equity portfolios, reflecting strong performance in both active and blended approaches. Umbra’s disciplined portfolio management, diversification, and proactive risk oversight continue to position the MPS range strongly as markets face an uncertain policy and economic landscape.
