Daily Stock Market Report (27 Dec)

Good morning, I hope everyone is having a lovely Christmas period. 

The markets are open again this morning, so we’ll have this post open for comments. For those who would rather chat about ideas than the (relatively thin) news, we are three stocks into our 12 stocks of Christmas. These are the stocks that we’re feeling optimistic about for 2025. Check out our analysis here: 

• Garmin
• International Personal Finance
• Impax Asset Management 
• Character
• MONY

Today's company news 

Name(Mkt Cap)	RNS	Summary	Our view
SRT Marine Systems (LON:SRT) (£110m)	New contract	$9m contract announced in November has been signed
Gelion (LON:GELN) (£25.8m)	Final results	Revenue entirely generated from R&D tax grants. Losses narrowing

Market Comment

It’s a quiet day on the companies front, but a few interesting snippets of information and conversation to close off the year.

Active funds have suffered heavy outflows, but the passives keep reeling in the punters. According to Morningstar the UK equities sector has seen investors pull more than £15bn from active funds. Some of the highest profile names in the industry have borne the biggest brunt of the negative sentiment towards UK equities. For example, investors pulled £2.6bn from Fundsmith (which has assets of £22.8bn under management). The normally popular Baillie Gifford funds also saw big redemptions.

The popularity of passives remains an interesting source of discussion. Passives are cheap, which is great for less experienced investors or those without a huge amount of time to research individual equities.

But passive fund growth feeds a virtuous circle which benefits the biggest companies in an index. In the US, the S&P500 is up 28% in the year to date, the Magnificent 7 stocks have risen 71% on average, while Nvidia is up 171%.

The Magnificent 7 stocks now make up 40% of the total market.

Japan is heading for a record close. The Nikkei looks set to close at its highest level since 1989 - when the market surged during the country’s economic bubble. Gains in the year have been driven by the nation’s car giants, as well as Sony and Uniqlo’s parent company Fast Retailing.

Uniqlo has been an extraordinarily high performer in the last few years. It’s gone from relative unknown, to a huge retail footprint globally, and is part of a number of companies which are encroaching on the dominant position in sportswear previously held by Nike and Adidas.

Japanese funds have caught the eye of many UK investors, with fund inflows to Japanese specialists among the highest this year.