This is part of our quarterly plan performance series. Catch up on last quarter’s summary here: How PensionBee’s plans are performing in 2024 (as at Q1).
We’ve passed the midpoint of 2024 and it’s proven to be as eventful as anticipated. This year has been dubbed the ‘year of elections‘, as over 80 countries head to the polls to elect their next government. With Emmanuel Macron calling a snap election in France and Joe Biden withdrawing from the Presidential race in the US, there’s already been a few twists and turns.
In terms of economic developments, the Bank of England in the UK achieved its 2% annual inflation target in May. Despite this, interest rates have been held steady at 5.25% since August 2023. In the US, inflation reached 3% in the 12 months leading up to June, while the Federal Reserve has maintained an interest rate range of 5.25% to 5.5% since July 2023.
There has been market growth in many geographies and sectors this year, with one of the biggest winners being Japan, with their ultralow interest rates, weak currency and solid economy. Investors (including Warren Buffet) have flocked to the Nikkei 225 to enjoy the spoils of their recent upwards swing. Customers in our equity plans have exposure to Japan, a developed market economy, and this has therefore been a performance enhancer this quarter for them.
Keep reading to find out how global markets and our PensionBee plans have performed over 2024 so far.
2024 figures cover the period between 1 January and 30 June 2024.
This blog is only meant to provide information. The data comes from our money managers or plan factsheets. Performance figures are before fees. Past performance isn’t an indicator of what will happen in the future. As with all investments, capital is at risk.
Company shares in 2024 (as at H1)
What are company shares?
Company shares are units of ownership in a company. When a company wants to raise money, it can issue shares to investors who pay a certain amount of money for each share. By buying shares, investors become part-owners of the company and can enjoy its profits or growth. But, they also take on the risk of a decline in share prices if the company performs poorly or even goes bankrupt. Company shares are also known as ‘stocks’ or ‘equities’, and they’re commonly traded on stock markets.
Global stock markets
From a snap election in France, the change of Democratic presidential nominees in the US, and rising geopolitical tensions in the Middle East - there’s been a backdrop of uncertainty in global markets. Despite this, many companies have proved resilient and have broadly delivered strong earnings in the year-to-date. The technology sector has seen another significant upswing, with Artificial Intelligence (AI) continuing to excite investors about future profits.
| Index | Investment location | Performance over H1 2024 (%) | Equity proportion (%) |
|---|---|---|---|
| FTSE 250 Index | UK | +3.0% | 100% |
| EuroStoxx 50 Index | Europe (excluding the UK) | +8.2% | 100% |
| S&P 500 Index | North America | +14.5% | 100% |
| Nikkei 225 Index | Japan | +18.3% | 100% |
| Hang Seng Index | Asia Pacific (excluding Japan) | +3.9% | 100% |
Source: BBC Market Data
PensionBee’s equity plans
| Plan | Money manager | Performance over H1 2024 (%) | Equity proportion (%) |
|---|---|---|---|
| Shariah Plan | HSBC (traded via State Street Global Advisors) | +21.5% | 100% |
| Fossil Fuel Free Plan | Legal & General | +11.9% | 100% |
| Impact Plan | BlackRock | +6.6% | 100% |
| Tailored (Vintage 2061 - 2063) Plan | BlackRock | +10.9% | 100% |
| Tailored (Vintage 2055 - 2057) Plan | BlackRock | +10.8% | 100% |
| Tailored (Vintage 2049 - 2051) Plan | BlackRock | +10.2% | 96% |
| Tailored (Vintage 2043 - 2045) Plan | BlackRock | +8.8% | 85% |
| Tracker Plan | State Street Global Advisors | +9.6% | 80% |
| Tailored (Vintage 2037 - 2039) Plan | BlackRock | +7.4% | 72% |
| 4Plus Plan | State Street Global Advisors | +8.2% | 71% ^ |
| Tailored (Vintage 2031 - 2033) Plan | BlackRock | +6.0% | 59% |
^Equity % at 30 June 2024, asset allocation changes on a weekly basis due to the plan’s actively managed component.
Bonds in 2024 (as at H1)
What are bonds?
Bonds are a type of investment where you lend money to an organisation, like a government (sovereign bonds) or company (corporate bonds). In return, they agree to pay you back with interest over a fixed and pre-agreed period of time, this is known as the coupon. A bond yield is the anticipated rate of annual return that an investor gets from a bond for its duration (maturity of the loan).
Bonds have different ratings, with AAA grade also known as “investment grade”, signifying the highest quality with minimal risk of default. Due to their historical stability and predictability, bonds are a popular choice for shorter-term investors such as retirees who plan to draw down in the near future. Bonds are also known as ‘fixed-income securities’ or debt.
Global bond markets
There was a widespread anticipation that interest rates would swiftly come down over the course of the year. Bonds have an inverse relationship with interest rates, so fixed income investors keep a sharp eye on these announcements.
With inflation proving sticky in many developed economies including the US, Central Banks have been hesitant to cut interest rates too quickly. This has continued the unusual trend of an ‘inverted yield curve’; meaning the shorter the bond term, the higher the price yield. This is occurring because the expectation is that over the long term interest rates will increasingly fall.
| Fund | Source | Performance over H1 2024 (%) | Fixed-income proportion (%) |
|---|---|---|---|
| Schroder Long Dated Corporate Bond Fund | Morningstar | -2.8% | 86% |
Source: Morningstar
PensionBee’s fixed-income plans
| Plan | Money manager | Performance over H1 2024 (%) | Fixed-income proportion (%) |
|---|---|---|---|
| Pre-Annuity Plan | State Street Global Advisors | -3.9% | 100% |
| Tailored (LifePath Flexi) Plan | BlackRock | +3.6% | 72% |
| Tailored (Vintage 2025 - 2027) Plan | BlackRock | +4.5% | 41% |
PensionBee’s money market plans
| Plan | Money manager | Performance over H1 2024 (%) | Cash equivalent proportion (%) |
|---|---|---|---|
| Preserve Plan | State Street Global Advisors | +2.7% | 94% |
Have a question? Get in touch!
Do you want to know more about your pension plan with PensionBee? You can check out our Plans page to learn how your money is invested in different assets and locations, or log in to your BeeHive to see your specific plan. You can always send comments and questions to our team via engagement@pensionbee.com.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
