Merill SICAV plc conducted its 9th Annual General Meeting (AGM), in which it presented the financial statements for the year ended 31st July 2024. Following the AGM, Mr Jesmond Mizzi, managing director of Jesmond Mizzi Financial Advisors (delegated portfolio management entity), delivered a market overview for 2024 while Dr. Mark Azzopardi, portfolio manager for the Merill SICAV plc, spoke about the performance of the sub-funds and his outlook for 2025.
Market Overview 2024
The financial landscape in 2024 was shaped by a combination of global factors that tested market resilience. Elevated inflationary pressures, geopolitical conflicts, and fluctuating interest rates created a complex economic environment. However, the easing of monetary policies towards the latter half of the year provided a much-needed stimulus, helping stabilise key markets.
Against this backdrop, equity markets performed well, particularly in the technology sector, where AI(Artificial Intelligence)-driven stocks led a significant rally. Bond markets also saw renewed interest as yields remained elevated, reflecting both investor caution and economic uncertainty.
Merill’s Performance in 2024
Amid this volatility, Merill SICAV plc delivered a strong performance across its investment funds. The Merill Total Return Income Fund posted a 5.15 percent gain, benefiting from a strategic shift towards corporate bonds at the expense of government bonds. The fund’s actively managed approach helped navigate inflationary trends, with its bond portfolio maintaining an average price below par, offering further upside potential.
The Merill High Income Fund achieved an impressive 7.55 percent return, demonstrating resilience despite market fluctuations. Notably, the fund increased its exposure to investment-grade bonds while maintaining a high-yield focus. The average bond price remained below par, signalling room for price appreciation.
The Merill Global Equity Income Fund had a strong year, returning 13.04 percent. The fund’s diversified exposure across global equity markets, combined with lower volatility compared to broader indices, contributed to its positive results.
The Merill Strategic Balanced Fund, denominated in US dollars, returned 3.34 percent, benefiting from a mix of investment-grade and high-yield bonds. Despite market headwinds, the fund’s active management and quality bond holdings supported positive performance.
Outlook for 2025: Navigating Diverging Market Trends
Looking ahead to 2025, market dynamics are expected to be influenced by global political shifts, monetary policy adjustments, and sector-specific trends.
While inflation has been tamed to an extent, uncertainty remains. The European Central Bank is likely to continue cutting interest rates in 2025, to stimulate growth. The Bank of England may follow a similar path, while in the United States, rate cuts are less certain given the strength of the economy.
Geopolitical uncertainty will also play a significant role in shaping financial markets. The return of Donald Trump to the White House could trigger changes in fiscal policy, tax rates, and trade relations. Higher tariffs, particularly on China, may escalate inflationary risks and market volatility.
As the new administration in the US implements new policies US equities may not continue to dominate as they have in recent years and international equities could offer competitive returns. Companies with strong balance sheets are expected to outperform government bonds, given rising public debt levels
With central banks poised to cut rates, bond prices could rise further. Investment-grade corporate bonds may present attractive opportunities, particularly for income-focused investors.
Active Investment Management: A Key Strategy for 2025
Given the rapidly evolving financial landscape, active investment management will be more crucial than ever. Diverging economic growth rates, geopolitical shifts, and monetary policy changes will require a hands-on approach to identify opportunities and mitigate risks.
Merill’s track record of active portfolio management positions it well for the year ahead. Whether in equities, bonds, or diversified income funds, an agile investment strategy will be vital to navigating the opportunities and challenges of 2025.
This press release has been issued by Merill SICAV plc, a diversified investment fund based in Malta, offering a range of investment opportunities across different asset classes. With a focus on delivering sustainable returns and capital growth, Merill SICAV plc is committed to excellence in fund management and investor relations. Merill SICAV plc, is incorporated and licensed by the MFSA as an open-ended collective investment scheme, registered in Malta, qualifying as a Maltese UCITS in terms of the UCITS Directive. Investors should remember that past performance is no guarantee of future performance, and the income and capital are not guaranteed.
