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Outline of Mountains

Ark Review of the Month

February 2024

Global Markets


Global equity markets exhibited positive performance in February, driven by multiple factors including recovering global economic data and strong corporate earnings reports. Emerging markets led the gains, with the MSCI Asia ex-Japan and MSCI Emerging Markets indices rising 5.6% and 4.8%, respectively, primarily fuelled by the rebound in Chinese equities. Among developed markets, Japan maintained its outperformance, with the Nikkei 225 reaching a 30-year high. The US S&P 500 and the MSCI Europe ex-UK indices also closed the month higher, gaining 5.3% and 2.8%.


Conversely, fixed income markets faced headwinds due to the slowdown in central bank rate cuts. UK gilt prices and US Treasury prices declined by 1.2% and 1.3% in February. Global investment-grade corporate bond prices also witnessed a 1.3% decline over the month.

As of 29 February 2024:

UK 10 Year Gilt Yield 4.22%
US 10 Year Treasury Yield 4.26%
Germany 10 Year Bund Yield 2.42%

UK Market

Despite the broad rally in global stock markets, the UK FTSE All-Share index has fallen 1.1% year-to-date. This performance is closely linked to the challenging economic environment currently facing the UK. Previously, the UK announced a 0.3% quarter-on-quarter decline in GDP for Q4 2023, signifying a technical recession.


Recent wage growth data from the UK offered some positive signs. December's figures showed slower, yet better-than-anticipated, growth. Total earnings, including bonuses, increased by 5.8% year-on-year. However, this rise in wages has raised concerns about inflation potentially proving more persistent than previously expected. Consequently, investors have revised their expectations for rate cuts by the Bank of England, leading to pressure on UK gilts, which have fallen 3.6% year-to-date.

Ark Insights

Over the past year, inflation in most economies has declined significantly, approaching target levels. This has coincided with better-than-expected global economic performance, suggesting the possibility of an "immaculate disinflation": inflation moderates while economic activity continues to grow and unemployment remains low. Major central banks have also begun to adjust their communication, de-emphasising upside risks to interest rates and focusing on downside risks. It is expected that interest rates will be lowered this year, but the extent of further easing remains to be seen.


The global economic outlook is brighter. Schroders' latest forecast has revised up global GDP growth for 2024 and 2025 to 2.6% and 2.7%, respectively. Among them, the US economy has shown strong resilience. Although the number of new jobs has decreased, it will still remain at a healthy level, supporting consumer spending. At the same time, the continued decline in inflation and the improvement in real income growth will also benefit consumer spending. Falling inflation will allow the Fed to start lowering the federal funds rate as early as this summer. However, the UK economy has fallen into recession due to sticky inflation and structural supply problems, and is expected to recover slowly in 2024. Fiscal stimulus before the UK general election may help economic growth.


As always, our Investor Relations team would be more than happy to help you with any queries.


The views expressed in this update are not intended as an offer or solicitation for the purchase or sale of any investment or financial instrument. The views reflect the views of Ark Investment Management at the date of this document and, whilst the opinions stated are honestly held, they are not guaranteed and should not be relied upon and may be subject to change without notice. Investments entail risks. Past performance is not necessarily a guide to future performance. There is no guarantee that you will recover the amount of your original investment. The information contained in this update does not constitute investment advice and should not be used as the basis of any investment decision. Any references to specific securities or indices are included for the purposes of illustration only and should not be construed as a recommendation to either buy or sell these securities or invest in a particular sector. If you are in any doubt, please speak to us or your financial adviser as appropriate.

Issued by Ark Investment Management Ltd which is authorised and regulated by the Financial Conduct Authority. 

© Ark Investment Management Ltd. Registered in England & Wales with the company number 09281759.

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