Company: SWZ
Filing Date: 2025-03-11
Form Type: N-CSR
Source: 0001839882-25-014961
Chunk: 2

Company: Total Return Securities Fund
Filing Date: 2025-03-11
Form: N-CSR
Chunk 2
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 easing inflation and shifting monetary policies. The year marked the beginning of an interest rate-cutting cycle across many major developed economies. The US Federal Reserve (“Fed”) kept interest rates at a 23-year high in July, prompting concerns among investors that the Fed had waited too long to lower rates. This delay heightened fears of a potential hard landing or recession, particularly after weaker economic data and a lower-than-expected jobs report [was released in July]. The Fed started its monetary easing in September with a rate cut of 50 basis points, followed by additional reductions of 25 basis points in November and December. The presidential election victory of Donald Trump fuelled optimism, driven by expectations that his policy programme will lift growth, lower taxes and cut regulation. However, Donald Trump’s election victory also raised expectations that the Fed might be forced to keep interest rates higher for longer, as his proposed policies are likely to bring inflationary pressures. The European Central Bank (“ECB”) continued its rate cutting cycle after cutting rates by 25 basis points in June, with additional rate cuts of 25 basis points in September, October, and December. While consumer demand showed signs of improvement, structural challenges in the manufacturing sector remain, pointing only to a gradual economic recovery. Meanwhile, political instability in Germany and France, coupled with fears of trade wars following Trump’s election, added to Europe’s economic uncertainty. Market environment during the period under review Global equities performed strongly in 2024, driven in part by global monetary easing, with falling interest rates boosting returns in equities. US equities led the gains, driven by heightened demand for stocks linked to Artificial Intelligence and positive market reactions to the election of Donald Trump. However, the year was also characterised by volatility, including a short equity market sell-off in early August, which led to declines in major indices such as the MSCI World Index. For 2 THE SWISS HELVETIA FUND, INC. the rest of the year, indications by the Fed that sticky inflation may result in fewer cuts in 2025, and the concerns about the impacts of Trump’s proposed tariffs negatively impacted equity returns for emerging markets and Europe. Fixed income markets experienced considerable volatility in 2024, primarily driven by geopolitical tensions, central bank decisions, and fluctuating inflation rates. The 10-year Treasury yield rose in the second half of 2024, finishing the year at 4.57%, suggesting market uncertainty regarding the Fed’s future actions amidst rising expectations that inflation may continue if President-elect Trump were to implement