Following one of the worst years in markets since 2008, global equities rallied in 2023 shrugging off Wall Street’s negative predictions at the start of the year, delivering strong returns to their investors. Market sentiment was supported by falling inflation, particularly energy prices, a rally in AI stocks and the anticipated interest rate cuts by central banks.
With the majority of Ancoria’s fund ending 2023 on a positive note, lets revisit some of the best performing funds of the year.
The Ancoria USA Fund was the best preforming fund in 2023 returning 29.91% in USD (23.84% in SEK). US equities managed to outperform other developed markets as a rise in AI technology at the start of the year triggered a rally in tech stocks. Cooling inflation rate further boosted investors’ positive sentiment as the Federal Reserve is expected to start cutting rates soon. The US economy held up much better than initially anticipated despite increasing interest rates throughout the year, amid low unemployment levels, improving consumer confidence and strong GDP growth.
Carnegie Sweden fund delivered 17.36% in SEK in 2023. While concerns surrounding the impacts of higher interest rates and the country’s real estate crisis continue to linger over the economy, Swedish equities took support from positive global sentiment. In addition, weaknesses in the Swedish krona aided large companies that report their revenues in foreign currencies. Falling inflation rate has also raised hopes that the central bank’s tightening campaign, which has impacted consumers’ sentiment, has come to an end.
Carnegie Small Cap
It was a volatile year for small cap stocks but in the end the fund managed to lock in gains following a rally in November and December. The Fund delivered 15.97% in SEK after global sentiment turned positive following Federal Reserves dovish pivot in November. In light of positive market sentiment investors risk appetite improved benefiting small cap stocks.
European stocks advanced as the area managed to avoid an energy crisis that had cast a shadow over the region at the beginning of the year. The Fund generated 15.12% in EUR as positive market sentiment outweighed weak Chinese recovery. While the ECB has maintained a more hawkish stance against inflation compared to the Fed, markets are pricing that the ECB will have to start lowering rates sooner rather than later as the euro-area growth has stagnated for most of the year. Lower inflation rate further supported this narrative.
With most major indices delivering double digit gains in 2023, many of Ancoria’s Structured Funds were autocalled in 2023, returning back to investors 100% of their initial investments plus coupons. Below are the Structured Funds that were autocalled during the fourth quarter:
Ancoria 3-Year SEK Autocall 6% Fund: The Fund was autocalled on 18/12/2023, two years after its launch date, as both of the underlying indices closed above their strike price. The OMX Stockholm 30 Index closed at 2,374.170 i.e. 2.7% above its initial level, while the S&P 500 Index closed at 4,740.56 i.e., 1.5% above its initial level. Policyholders received back their initial capital plus a gross coupon of 12%.
Ancoria 3-Yr SEK Autocall 10.25% Fund: The Fund was autocalled on 25/10/2023 one year after it was launched. On 25/10/2023 the OMX Stockholm 30 Index closed at 2,073.840, 5.5% above the Fund’s strike price and policyholders received back their initial capital plus a gross coupon of 10.25%for the one year they were invested.
Ancoria 2-Yr EUR Autocall 3.25% Guaranteed Coupon: The Fund was autocalled on 10/10/2023, one year after it was launched. The S&P 500 Index closed above its initial level and policyholders received back their initial capital plus the guaranteed net coupon of 3.25% for the one year they were invested.