- 31 DecVector 2021 Annual Review
- 15 OctQ3 Review
- 17 AugChinese crackdowns
- 22 JulVector 2021 Semi-Annual Review
- 25 JunWhy we still like value
- 25 May'Transitory' Inflation
- 22 AprReversal to the mean?
- 17 MarVector's take on sustainable finance
- 09 MarSustainability-related disclosures in the financial services sector (SFDR)
- 19 FebDavid versus Goliath: An analysis of 2020 stock market performance
- 30 DecVector 2020 Annual Review
- 20 NovFactor momentum
- 20 OctHow will the US elections influence your portfolio?
- 25 SepAre better times for quant investing on the horizon?
- 26 AugFama/French going through its biggest drawdown since 1963
- 17 JulVector 2020 Semi-Annual Review
- 25 JunA Look At Post-Corona Market Valuations
- 25 MayUnprecedented times call for unprecedented measures...
- 23 AprVector's outlook on the Corona Crisis
- 13 MarMarket correction: sense or sentiment?
- 17 FebThe market and sector concentration
- 14 JanNotice to shareholders
- 31 DecVector 2019 Annual Review
- 17 DecFama/French going through its second biggest drawdown since 1963
- 15 NovThe Alpha Lifecycle
- 16 OctVector 2019 Q3 Review
- 10 SepA new prospectus
- 14 AugMarket Review: July
- 10 JulVector 2019 Semi-annual Review
- 14 JunAre factor premia disappearing?
- 21 MayHow persistent is regional outperformance?
- 12 AprMarket recovery: sense or sentiment?
- 12 MarMarkets solidify recovery
- 12 FebStock Markets Rebound
- 31 DecVector 2018 Annual Review
- 14 Dec2019 (outrageous) predictions!
- 20 AugTemperatures and stock markets heat up
- 18 JulVector 2018 Semi-annual Review
- 14 JunDo exporters suffer during trade wars?
- 15 MayStrong earnings put markets on the road to recovery
- 17 AprQ1 Overview
- 13 MarStock Markets: Episode VI: The return of volatility
- 02 MarVector wins Morningstar Germany and Belgium Awards!
- 22 FebVector Flexible wins De Tijd/L'Echo Awards for the third year in a row!
- 16 FebNavigator wins Morningstar France Award!
Vector 2024 Annual Review
31 Dec 2024
Dear Investors,
The global economy in 2024 experienced measured growth alongside notable transitions, including shifts in monetary policy, advancements in technology, and evolving geopolitical dynamics. Central banks moved toward more accommodative stances as inflation pressures eased, while technological breakthroughs—particularly in AI—reshaped industries and market leaders. Geopolitical tensions and trade adjustments further influenced the global economic landscape. Equity markets demonstrated resilience in face of these challenges, offering opportunities for diversified investors.
In developed markets, U.S. equities showcased another stellar year, with US equities rising significantly during the year. Europe, however, lagged, as its manufacturing sector grappled with a cocktail of high energy costs, restrictive regulations, and weak export demand. Asia delivered mid-tier performance, buoyed by a late recovery in Chinese equities as domestic stimulus measures improved investor sentiment toward the year’s end.
Some sectors, particularly technology and communication services, benefitted from the dominance of the “Magnificent Seven” companies. Within the MSCI indices, the top three companies in these industries now account for 55.16% and 69.04% of their respective composites, rendering them highly sensitive to the performance of a few dominant players. While regional and sectoral trends often boiled down to whether a composite included these giants, financials stood out as a notable exception. The sector demonstrated resilience, driven by optimism for deregulation following the U.S. elections. Conversely, other interest-rate-sensitive sectors, such as real estate and utilities, lagged the broader market.
Quantitative and multifactor investing strategies delivered mixed outcomes in 2024. Large-cap equities significantly outperformed small caps in developed markets, as investors sought stability amidst global uncertainties. Growth stocks reinforced their leadership, fuelled by an extensive rally in AI-related equities. Momentum emerged as the dominant strategy for the year, as trends that drove success in 2023 continued to deliver strong returns. While value stocks received some support from financials, they underperformed growth counterparts by a wide margin.
Vector Navigator achieved a performance of 17.64% in 2024. As the value-weighted structure of the benchmark disproportionally allocates to the dominant “Magnificent Seven” companies, our flagship fund held up relatively well. Vector Flexible recorded a return of 7.01% last year, largely in line with its competitors. Around the turn of the year, the hedge was further increased within the sub-fund as market valuations have gotten more expensive.
While the trend of increasingly concentrated positions within the benchmark has proven advantageous for passive investing in the short term, we do not believe it is sustainable over the long run. Our more diversified approach, which avoids excessive concentration risk, positions us to deliver durable value for investors. While it may create headwinds in the current market environment, we are confident it will benefit our investors in the long term by emphasizing diversification and resilience over fleeting market trends.
Best regards
Werner, Thierry & Nils