The above chart illustrates how various asset classes performed in 2023 and shows the performance of our benchmark funds in each of the main asset classes.

Investment markets have delivered strong gains. Global equities were the biggest contributor and the performance of bonds was very strong in the final two months of the year.

The key highlights over the year were:

Bonds

Having treaded water for most of 2023, bonds finished the year in style, with government bond and corporate bond funds up by between 5% to 9%. In the final quarter of the year, inflation readings fell dramatically and bond markets responded positively to these expectations.

Property

Property funds moved lower in 2023, but only moderately, and much less than might be expected from media commentary. The benchmark Aviva Irish Property fund was down 2%. Although office values fell, retail and industrial property held up well and rental income supported returns.

Equities

Equities were the standout performer in 2023, with the MSCI World up c. 19% in total return euro terms.

The global equity exposure we hold has outperformed smaller company and emerging market equities. Global equity gains were concentrated in a relatively small number of stocks with Generative Artificial Intelligence being a key driver of gains.

Multi-Asset Funds

Multi-asset funds have benefitted from the strong performance of equities and bonds.