Please upgrade your browser

We take your security very seriously. In order to protect you and our systems, we are making changes to all HSBC websites that means some of the oldest web browser versions will no longer be able to access these sites. Generally, the latest versions of a browser (like Edge, Chrome, Safari, etc.) and an operating system family (like Microsoft Windows, MacOS) have the most up-to-date security features.

If you are seeing this message, we have detected that you are using an older, unsupported browser.

See how to update your browser

2024 Investment Outlook

A problem of interest - how rates affect investment strategy in 2024

Download the 2024 Investment Outlook

Investment Themes

Higher rates and tighter credit conditions have created ‘a problem of interest’.

This environment challenges economic and business growth, which is something investors should be prepared for.

1

A problem of interest

Higher interest rates and less availability of credit has helped reduce inflation. However, it risks sending developed economies into recession in the months ahead.
2

New Paradigm

We are in a new economic regime that is very different to the 2010s. Investors should not expect a return to the very low interest rates and loose credit conditions of the previous decade.
3

Defensive Growth

Market expectations are for a ‘soft landing’
– inflation continues to fall back as economies
slow, but growth remains positive. We focus on defensive strategies in portfolios to protect against adverse scenarios and think ‘bonds are back’.

Read our full outlook to explore the implications for portfolios:

  • Bonds are back
  • Divergent stories in equities
  • Keep an eye on emerging markets

Average non-investment grade bond yields exceed historic returns from equity

Pre-tax yields from non-investment grade credit versus historic stock market returns

Non-investment grade bond yields exceed historic returns from equity

Past performance is no guarantee of future returns.
Returns are for market indices and do not reflect any fees or currency considerations. Source: HSBC AM, Bloomberg, December 2023.
The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested.

Download your copy