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Gold tops asset classes as best performer of 2024

The average return on the 17-asset class basket was 7.2%

Published: Wed 1 Jan 2025, 6:18 PM

Updated: Wed 1 Jan 2025, 9:39 PM

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A worker polishes gold bullion bars at the ABC Refinery in Sydney. — AFP

A worker polishes gold bullion bars at the ABC Refinery in Sydney. — AFP

Gold was the best performing asset class last year, reflecting increasing risks and a flight to safety for a majority of investors, a study showed on Wednesday.

According to Kamco Invest’s Global asset class performance - 2024, the metal returned 27.2 per cent last year. US equities, the second-best performing asset class, returned 23.3 per cent, followed by the MSCI World Index, which gained 17 per cent in 2024. The Global Shariah Index, which returned 16.2 per cent during the year, rounded up the first four spots.

A number of emerging market countries invested in gold as a protection against a strong greenback.

The global portfolio of asset classes reported gains for the second consecutive year in 2024 backed by healthy gains in most asset classes during the year. The key asset class returns during the year were almost in the same direction as last year’s barring bonds indices, commodities, US dollar, global REIT and natural resource equities. Crude oil was the only asset class that showed declines for the two consecutive years. However, the larger commodities universe witnessed gains of 9.2 per cent during the year led by healthy returns for natural gas, aluminum and copper. The return on cash was also one of the highlights of the year that came in at 5.4 per cent, the highest in 24 years.

Equity markets closed the year 2024 with a healthy gain for the second consecutive year after reaching record highs on multiple occasions during the year. The gains were led by a broad-based positive performance across key global equity markets. The US market was second-best performing in the global portfolio with a return of 23.3 per cent for the S&P 500 Index. The index touched record highs 57 times during the year and registered the biggest two-year gain in 26 years. However, the bulk of the gain in the US was led by gain in the Technology index that was up by 35.7 per cent during the year. Also, the gain in shares of the Magnificent 7 stocks was the key reason for the healthy gains in the US during the year. According to Bloomberg, the combined index for the Magnificent 7 stocks was up 66.9 per cent during the year while the gain in the US Large-cap stocks excluding the Magnificent 7 stocks showed a much smaller gain of 14.5 per cent.

The average return on the 17-asset class basket was 7.2 per cent as compared to 9.2 per cent during 2023. The gain on the portfolio reflected resilient economic growth in the US with most indicators performing better than expected during the year. This was partially offset by softer growth in the eurozone as well as continued weakness in China that affected demand for crude oil and the prices.



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