January 31, 2024

2023 Market Round-up

By George Cliff

2023 Market round-up


It would simply not be right to speak on portfolio or market performance in 2023, before first remembering the many lives that have been lost in the year due to natural disaster and conflict. Life is precious and should be protected at all costs. Our thoughts go out to all of those that have been affected.

2023 Summary

  • Despite volatility, 2023 concluded on a much stronger note to where it began.
  • Global inflation continued to cool.
  • The US Central Bank expressed a more optimistic outlook for their economy.
  • Improvements to the US economy often lead to improvements elsewhere in the world.
  • Economists and markets alike are entering 2024 with a more positive outlook than last year.

Market review: From gloom to boom

At the start of the year, global inflation was at historically high levels (although decreasing), and there was a pessimistic sentiment and outlook from central banks, economists, and markets worldwide. Fast forward 12 months, and we ended the year with the world’s largest stock market (US: S&P 500) experiencing an almost 20% increase, with most markets around the globe showing strong performance. Additionally, the US Federal Reserve, the world’s largest central bank, expressed satisfaction with their progress.

The head of the US Federal Reserve, Chair Jerome Powell, also said that should inflation continue to cool, and conditions continue to improve, interest rate cuts were likely in 2024. The US market responded in earnest to this positive news, recording a new all-time high on the 22nd of December.

This is important because:

The US leads the way – Usually, the United States is at the forefront of economic advancement. If the actions and monetary policies of their Central Bank have a positive effect on the economic situation there, it is probable that other central banks worldwide will emulate their approach.

Interest rates drive investment returns – Financial markets are highly affected by interest rates. When rates decrease, companies have more capital to spend and consumers have more disposable income. This often leads to a new phase of economic growth. Conversely, when Central Banks raised rates aggressively in early 2022, it caused a significant decline in markets during the first half of the year.

Interest rates drive cash returns Interest rates drive the rate of returns available within cash deposit accounts, and with interest rates being so high recently, many investors have been enticed to divest from their investments and put their money into cash. Not only are rates set to fall, but many portfolios are already beating cash deposit rates. In fact 75% of portfolios available via a Managed Portfolio Services in the UK outperformed cash in 2023, net of all investor charges.

We started 2023 how we ended 2022, with gloom and worry about the year ahead. The year then had its ups and downs, and the media fanned the flames as much as they possibly could to bait our clicks, but inflation continued to cool and Central Bank sentiment improved, and markets and models finished the year in a much better place as a result.

Despite a positive end, 2023 was for the most part a volatile period for investors. Whether it was the averted US Banking crisis in March, the US banging its head on the debt ceiling in April or volatility through October in response to the conflict in Israel and Gaza. There was much negative news to drive portfolio behaviour in the short term.

Fortunately, global inflation has been kept in check due to actions taken by Central Banks, and influential voices are now expressing a more positive outlook. This has led the markets to recognise that the underlying fundamentals remain strong and that the future holds a more supportive environment for growth.

Although the US market index had a fantastic year, only 1.4% of S&P 500 companies (otherwise known as the ‘Magnificent 7’) drove 90% of the return. A key theme driving their success was the adoption of Artificial Intelligence (AI) and the new opportunities for efficiency and profitability that it represents. This is a good sign if we study historic market behaviour, as any strong and sustained period of growth is usually started by a handful of companies that represent a new and more profitable way of operating, which the broader market soon adopts.

A great example of this was Henry Ford’s introduction of the assembly line in the early 20th Century. He and the Ford Motor Company served as a ‘proof of concept’ in how much more efficient and profitable an organisation can be with this new approach. Fast forward 10 years and companies across all manufacturing industries around the world had introduced them, and a new wave of profitability and growth ensued.

2023 Summarised in Four Charts




  • The big moves in the US market, and specifically the Tech sector, are being driven by expectations that AI will have a dramatic impact on global productivity and company profits.
  • Tech companies invest a lot in R&D and with interest rates set to come down, the cost of capital will reduce and encourage greater investment and greater advances.
  • The beginning of any innovation cycle begins with a handful of firms that serve as a ‘proof of concept’ to the rest of the economy.
  • Henry Ford’s introduction of the production line soon became the single biggest driver of manufacturing productivity globally.
  • Will widespread adoption of AI be the next big driver of productivity?

Clever Marlborough Core MPS Performance Review

Positivity within financial markets began to feed through into the Clever Marlborough Core MPS

(otherwise known as CleverMPS Core) portfolios towards the end of the year, with the models closing out the year strongly, and the majority outperforming their respective benchmarks.

When tracking the behaviour of the CleverMPS Core 5 through the year, you can see the profound impact this pivot from the US Central Bank and more broadening positivity has had on returns. The substance to this positivity, as discussed above, means we enter 2024 with a much more upbeat outlook underpinning financial market behaviour.



Clever Marlborough Sustainable MPS Performance Review

The Clever Marlborough Sustainable MPS (otherwise known as CleverMPS Sustainable) portfolios continue to enjoy positive returns both in financial and non-financial terms, with ESG factors blended into the range, which continues to make a Sustainable contribution towards both People and Planet. Regulatory changes in 2024 could see an enhanced approach to Sustainable investing, powered by the Financial Conduct Authority’s Sustainable Disclosure Requirements directive. Please see the Impact and Positive Investment Themes in the Appendix of this report for more information.

A key consideration for investing in a Sustainable portfolio is ESG performance. We document the societal contribution each portfolio makes and have displayed Impact Analysis, in accordance with the United Nations Sustainable Development Goals within this review. For the first time, we have also included Positive Investment Theme analysis, which demonstrates the contribution each portfolio makes towards a given Positive Investment Theme. Our ESG ratings partner, MSCI, has categorised themes to group contributions made by each company held within a portfolio.

We continue to deliver a repeatable process for both IFAs and their clients, backed by an unrivalled level of support and personalised service.


Appendix: Impact and Positive Investment Themes CleverMPS Sustainable Portfolio 3


Impact and Positive Investment Themes CleverMPS Sustainable Portfolio 4


Impact and Positive Investment Themes CleverMPS Sustainable Portfolio 5


Impact and Positive Investment Themes CleverMPS Sustainable Portfolio 6


Impact and Positive Investment Themes CleverMPS Sustainable Portfolio 7



Author: George Cliff MBA – Director or Reseach at Clever Adviser Technology Ltd (Clever)

Risk Warnings

The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds. Our funds invest for the long-term and may not be appropriate for investors who plan to take money out within five years. The fund will be exposed to stock markets and market conditions can change rapidly. Prices can move irrationally and be affected unpredictably by diverse factors, including political and economic events. 5-year performance comparisons are not available at this time, as the Clever Marlborough Core MPS portfolios became live on 1/8/22.

The tables below display the performance benchmarks for the CleverMPS Core performance data displayed on page 6 and the CleverMPS Sustainable performance displayed on page 7 of this document.

Regulatory Information

This material is for distribution to professional clients only and should not be distributed to or relied upon by any other persons. It’s provided for general information purposes only and is not personal advice to anyone to invest in any fund or product. Information taken from trade and other sources is believed to be reliable, although we don’t represent this as accurate or complete and it shouldn’t be relied upon as such. Calls will be recorded for training and monitoring purposes. Issued by Marlborough Investment Management Limited, authorised and regulated by the Financial Conduct Authority (reference number 115231). Registered office: PO BOX 1852 Lichfield, Staffordshire, England, WS13 8XU. Registered in England No. 01947598. Investment Fund Services Limited (IFSL) is the Authorised Corporate Director of the Fund. IFSL is registered in England No. 06110770 and is authorised and regulated by the Financial Conduct Authority. Registered office: Marlborough House, 59 Chorley, New Road, Bolton, BL1 4QP. Copies of the Prospectus and Key Investor Information Documents are available from www.ifslfunds.com or can be requested as a paper copy by calling 0808 178 9321 or writing to IFSL at the registered office above.

All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. Issued by Clever Adviser Technology Ltd (Clever), a company registered in England and Wales (company number: 2910523) with registered office at Watergate House, 85 Watergate Street, Chester, Cheshire CH1 2LF.


Meet the Author

George Cliff

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