Our Ready-made Investments Quarterly Update

Here’s our update on what's been happening in the markets, as well as recent tactical changes we've made, and how our range of Ready-made Investment Funds are performing.

Remember the value of investments can fall as well as rise. You may not get back what you invest. We're not recommending Ready-made Investments as being suitable for you based on your personal circumstances, nor do we offer personal financial advice.

If you're unsure about this investment’s suitability for you, or you’re not confident about making your own investment decisions you should seek independent advice.

Q1 – January to March 2024

What’s been happening in markets?

The first three months of 2024 saw stock markets continue their upward trend as stronger economic growth supported the outlook for company profits and buoyed investor sentiment. The improvement in business conditions was especially visible in the UK where manufacturing and services industries appeared to be on the up.

Over in Asia, Japanese stocks outperformed their developed market peers in Japanese yen terms. Corporate governance reforms further boosted confidence in capital efficiency (i.e. how efficiently a company spends its money to operate and grow) and shareholder value creation (i.e. the value based on a company’s ability to sustain and grow profits over time).

The Bank of Japan also raised its policy rate for the first time in 17 years and loosened its control of yields (i.e. the return an investor can expect) on government debt as wages and inflation were finally taking off after years of falling prices. The fear that higher interest rates would result in a stronger currency, and therefore derail the market’s momentum, proved short-lived.

However, market sentiment turned negative for global government bond markets, after it became apparent that US interest rates might not fall as quickly, or as frequently, as some people were expecting. The latest US inflation data threw a spanner in the works by showing that price pressures remain stubbornly high.

German government bonds, however, outperformed as signs of slowing inflation (in the eurozone) and weaker-than-expected growth, allowed markets to increase their odds of imminent rate cuts. The European Central Bank (ECB) reinforced this market pricing by signalling that it was comfortable lowering interest rates at some point this year.


What changes have we made?

Our Strategic Asset Allocation (SAA) is our optimum mix of shares, bonds, and cash designed to give you the best portfolio outcome for the long term. While our Tactical Asset Allocation (TAA) is the process where we actively deviate from our SAA, in order to take advantage of short-term investment opportunities.

In the first three months of 2024, we increased our exposure to global shares and reduced our cash and short-dated government bond holdings. We felt that economic growth was far more resilient than expected, and the potential for falling interest rates was setting the stage for further strength in stock market valuations. We also reduced our funds’ exposure to developed market (ex-Japan) government bonds.

The improvement in global growth activity reduced the risk-reward trade-off in government bonds. Lowering our exposure accounts for this more balanced outlook.

Next steps

You can relax in the knowledge that we will continue to monitor and manage your Ready-made Investments and we’ll update you regularly on their performance and any changes we’ve made.

Of course, if you’d like to see the latest performance of your investments simply log-in to your Smart Investor account any time.

How the funds have performed

View the accessible version of our charts

Ready to buy?

Already have a Smart Investor account?

You can buy your Ready-made Investment using an existing account.

Open a new Smart Investor account

You can choose from two types of account. Once your account is open, you can buy your chosen Ready-made Investment.

Investment ISA

The most popular account people choose when they start to invest.

You can pay in up to £20,000 per tax year into our award-winning ISA.

Any returns you make are tax free.

Tax rules can change in future and their effects on you will depend on your indvidual circumstances.

Investment Account

A flexible account if you’ve already used your ISA allowance for the current tax year or you’re already paying into an ISA with another provider.

No limits on the amount you can invest.

The return you make on your investments will be taxable but there are allowances that may mean you don’t pay tax, or it's reduced.1

Smart Investor is an investment service for UK residents aged 18 or over. The service is not available to US persons, even if they are resident in the UK.