Ariel Investments International Developed Markets Q4 2024 Commentary

2025-02-23 09:39:00 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.
• Ariel International Composite declined -4.98% gross of fees (-5.12% net of fees) in the quarter, ahead of MSCI EAFE and MSCI EAFE Value Indices, which returned -8.11% and -7.12%, respectively.
• The stock market dynamics of 2024 highlight a transformative shift in the global economy, fueled by advancements in artificial intelligence and geopolitical fragmentation.

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)) Composite declined -4.98% gross of fees (-5.12% net of fees) in the quarter, ahead of both its primary and secondary benchmark, the MSCI EAFE and MSCI EAFE Value Indices, which returned -8.11% and -7.12%, respectively. Over the last one-year period, the Ariel International ((DM)) Composite advanced +7.56% gross of fees (+6.90% net of fees), outperforming both the MSCI EAFE Index and the MSCI EAFE Value Index, which returned +3.82% and +5.68%, respectively....

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