The year in brief
A year marked by continued war in our neighborhood and geopolitical unrest globally. A year when half the world held elections, including eight of the ten most populous countries. Despite many uncertainties, the financial markets performed strongly in 2024. All asset classes in the portfolio delivered positive returns, with global equities showing particularly strong performance. Fixed-income assets contributed positively to results. Real estate and alternative investments showed slightly positive returns, in line with the lag in the real economy.
Inflation, interest rates, and economic worries were major discussion topics. Inflation slowed in many countries, prompting central banks to start cutting rates. Despite fears of recession, several economies proved more resilient than expected.
Equities—especially the global equity market where U.S. stocks dominate—performed strongly. Return differences between geographic equity markets were significant. In Swedish krona, global indices rose by just over 30 percent, while Swedish equities rose by nearly 9 percent. Emerging markets, measured as an index, rose nearly 19 percent.
The upswing, as in the previous year, was driven by a handful of U.S. tech-focused companies known as the “Magnificent Seven.” These seven companies accounted for about half the returns in the U.S. market during 2024. Together, they now make up a third of the U.S. stock market and nearly a quarter of the global equity market. This increased concentration means future equity returns will largely depend on these companies. Their size affects not only index returns but also investor sentiment.
The strong U.S. performance was supported by a resilient economy and labor market, falling inflation, and eventually rate cuts by the Federal Reserve.
Globally, economies withstood the year well. Most countries emerged from the inflation and high-interest rate environment without entering deep recession. Significant regional differences remained—Europe’s recovery was weak, marked by stagnating productivity and declining consumption. Given a weaker economy and faster declining inflation, the Swedish Riksbank and the European Central Bank were able to cut rates faster than the Fed.
A backlash against sustainability emerged in some markets, especially in the U.S., where political actors pushed insurers, banks, and similar institutions to prioritize maximizing returns—even when investments risk undermining sustainability goals. Several large U.S. asset managers reduced their support for shareholder proposals on climate and human rights. Some U.S. banks left the Net-Zero Banking Alliance, a global initiative committing banks to aligning their portfolios with net-zero greenhouse gas emissions by 2050, in line with the Paris Agreement.
At the same time, large tech companies like Alphabet and Meta reduced their commitments to diversity and inclusion. This raises questions about the long-term resilience of global sustainability efforts and the importance of continued investor pressure and transparency.
The Church of Sweden’s asset management navigated this landscape with continued focus on long-termism, responsibility, and ethical integrity. The result was SEK 1,114 million, corresponding to a 10.0 percent return—exceeding the return target and marking a positive result for nine of the past ten years.
Read more on our website, About our Sustainable Investments
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