HANDLS Monthly Income Report: December 2024

December Category Performance

11/29/2024 - 12/31/2024
 

The graph and table above provide return data for major income-oriented asset categories for the month of December 2024 and YTD 2024. Returns for each asset category are based on the returns of the constituent(s) in the Nasdaq HANDLS™ Base Index representing that category. Also included are returns for the Nasdaq 5HANDL™ Index, the Nasdaq 7HANDL™ Index and the Nasdaq 10HANDL™ Index.

December's Downturn: A Volatile Finish to 2024

December 2024 was a challenging month for most asset classes, with risk assets underperforming as investors navigated the final stretch of the year. High Yield Bonds were down 0.74% for the month but still posted a solid YTD return of 8.14%. In contrast, investment-grade corporate bonds faced steeper declines, losing 1.56% in December, though they ended the year with a positive return of 3.19%. Active Fixed Income strategies, including MBS and Build America Bonds, also saw losses, down 1.73% and 3.03%, respectively, which capped their YTD returns to modest gains of 1.86% and 1.03%.

Equities mirrored the trend in fixed income, with most sectors struggling as risk aversion took hold. The Growth & Income sector, which had enjoyed strong performance through much of the year, dropped 3.63% in December, yet managed to deliver a stellar YTD return of 20.20%. Dividend Equity also struggled, falling 3.90%, but finished the year with a solid 16.99% return. Meanwhile, Preferreds, Covered Calls, and REITs experienced even sharper declines, falling 3.94%, 4.14%, and 7.95%, respectively.

The broader market, as measured by Large Cap Equity, was down 3.92% in December, but its YTD return of 21.12% speaks to its resilience in 2024. Energy-heavy MLPs held up better, with a relatively mild drop of 6.16%, ending the year with an impressive 22.76% return, benefiting from a strong energy market. Utilities, despite facing headwinds in December (-7.97%), finished with one of the best performances of the year, returning 23.00% YTD.

Since Inception Category

3/12/2009 - 12/31/2024
 

*The graph and table above provide return data for major income-oriented asset categories since inception of HANDLS Indexes (3/12/2009). Returns for each asset category are based on the returns of the constituent(s) in the Nasdaq HANDLS™ Base Index representing that category. Also included are returns for the Nasdaq 5HANDL™ Index, the Nasdaq 7HANDL™ Index and the Nasdaq 10HANDL™ Index.  Inception dates for MLPs (1/2/2013), Build America Bonds (1/2/2010) and Active Fixed Income (1/2/2014)

The HANDL™ Indexes, which reflect a diversified approach to income investing, also encountered challenges in December. The Nasdaq 5HANDL™ Index lost 1.61% for the month, but its YTD return of 12.03% remained solid. The more aggressive Nasdaq 10HANDL™ Index saw steeper losses in December (-6.49%) and delivered a YTD return of 14.76%.  For the year, it's worth noting that the HANDLS Indexes have out-returned their defined distribution rates (HANDL) in 2024, continuing a trend seen in 6 of the past 7 years.

• Nasdaq 5HANDL™ Index: -1.61%
• Nasdaq 7HANDL™ Index: -4.10% (1.3x leveraged)
• Nasdaq 10HANDL™ Index: -6.49% (2.0x leveraged)

Overall, December closed a year defined by volatility and divergence between asset classes. As we look ahead, balancing risk and income will remain key as investors face a potentially robust economic environment.
 

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