Ariel Investments Ariel Global Fund Q4 2024 Commentary

2025-02-23 14:05:00 ET

Summary

• Ariel Global Composite fell -3.51% gross of fees (-3.65% net of fees) in the quarter, trailing the -0.99% return posted by the MSCI ACWI Index, but ahead of the -4.71% decline of the MSCI ACWI Value Index.
• Ariel’s non-consensus approach seeks to identify undervalued, out-of-favor, franchises that are misunderstood and therefore mispriced.
• In addition to purchasing Italian bank, Banca Monte dei Paschi, we initiated eight new positions in the quarter.

Markets worldwide defied expectations in 2024 led by the dominating performance of U.S. mega-cap technology companies and investor enthusiasm for artificial intelligence ((AI)) themed stocks. However, persistent challenges in the Eurozone, including uncertainty around interest rates, concerns surrounding the new U.S. administration’s policies as well as a strengthening U.S. dollar drove the MSCI ACWI, MSCI ACWI ex-U.S. and MSCI EAFE Indices into the red. China’s economy also ended the year sluggishly, with September’s stimulus efforts losing steam and the recovery in consumer spending turning elusive. Although uncertainty and volatility are likely to remain elevated, the patient investor knows “stock prices trade on fundamentals. And when those solid fundamentals shine through, share prices rise. ¹ ” Against this backdrop, the Ariel Global Composite fell -3.51% gross of fees (-3.65% net of fees) in the quarter, trailing the -0.99% return posted by the MSCI ACWI Index, but ahead of the -4.71% decline of the MSCI ACWI Value Index. Over the last one-year period, the Ariel Global Composite advanced +8.12% gross of fees (+7.55% net of fees), underperforming the MSCI ACWI Index’s +17.49% gain and the +10.76% return of the MSCI ACWI Value Index....

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