Ariel Investments International Developed Markets/Emerging Markets Q4 2024 Commentary

2025-02-23 10:00:00 ET

Summary

• Markets worldwide defied expectations in 2024 led by the dominating performance of U.S. mega-cap technology companies and investor enthusiasm for artificial intelligence themed stocks.
• Over the trailing one-year period, Ariel International (DM/EM) Composite increased +5.98% gross of fees (+5.43% net of fees), relatively in-line with MSCI ACWI ex- US Index and MSCI ACWI ex-US Value Index, which gained +5.53% and +6.04%, respectively.
• Ariel’s non-consensus approach seeks to identify undervalued, out-of-favor, franchises that are misunderstood and therefore mispriced.

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 International (DM/EM) Composite decreased -4.94% gross of fees (-5.07% net of fees) in the period, outpacing both its primary and secondary benchmark, the MSCI ACWI ex-US and MSCI ACWI ex-US Value Indices, which returned -7.60% and -7.31%, respectively. ...

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