My prediction for the best-performing ASX sectors in 2024

2024 could be another extremely interesting year!

A diverse group of people form a circle at a park and raise their arms together.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

We've nearly reached 2024 after a very volatile 2023. In fact, the previous three years were incredibly volatile as well! For a bit of fun, I'm going to talk about which ASX sectors of the share market I think might perform strongly in 2024.

Remember, though, that the future is unpredictable. And I wouldn't suggest deciding on investments based on a relatively short time period, like 12 months.

Looking at the bigger picture, 2023 has clearly been a strong year for ASX tech shares. Will 2024 be another good year for tech? Perhaps. But the market already appears to have returned to an optimistic outlook amid potential US Fed interest rate cuts in 2024. I'm not betting on tech being a strong performer in 2024 like I did 12 months ago.

February 2024 might be a very interesting reporting season for the ASX, and the 2024 US election will likely spark some fireworks. But, if we just focus on the companies and valuations today, I like the look of these ASX sectors.

Fund managers

The last couple of months have seen a strong rally in the share prices of some fund managers and I think most of 2024 will be positive as well. The outlook is improving, with interest rate cuts hopefully on the horizon and household confidence boosted as a result. This could lead to people investing more money with good investment managers.

The quality fund managers may be able to achieve net inflows from clients, and any growth of asset prices would also help funds under management (FUM).

In the ASX financial sector, I'm thinking that companies including GQG Partners Inc (ASX: GQG), Pinnacle Investment Management Group Ltd (ASX: PNI) and Pacific Current Group Ltd (ASX: PAC) look good to me.

I'm a little less certain about property fund managers from here because the impacts of higher interest rates are yet to fully flow through, particularly with debt costs. But, I think over two or three years, some property fund managers may be able to generate very good returns if interest rate cuts start happening.

ASX small-cap shares

I think the market hasn't fully appreciated the attractive opportunities on offer with smaller businesses. Maybe it's because smaller companies are seen as riskier. Maybe it's because some investors are still fearful of what might happen. Perhaps some small businesses aren't reporting good trading updates.

If I look at many of the valuations of S&P/ASX 200 Index (ASX: XJO) shares, I'd say many of them have recovered strongly from lows in 2022 or 2023 and don't look as good value as they did before. But, there are many more ASX small-cap shares that look attractive for the long-term, so this is an ASX sector I'd search for ideas.

Some of the ASX small-cap shares I like the look of include Close The Loop Ltd (ASX: CLG), Frontier Digital Ventures Ltd (ASX: FDV), Universal Store Holdings Ltd (ASX: UNI) and Airtasker Ltd (ASX: ART).

Online retailers

The impact of COVID-19 on retail is long gone – e-commerce ASX shares are no longer reporting results that compare against strong sales in 2021 or 2022.

Prior to COVID-19, online retailers were benefiting from the slow but steady adoption of online shopping, and those businesses were generally seeing improving scale and operating leverage.

I think companies that do a lot (or all) of their retailing online can perform strongly in 2024 – we're already seeing online sales perform well. For example, in the first few months of FY24, Coles Group Ltd (ASX: COL) and Temple & Webster Group Ltd (ASX: TPW) saw impressive growth in online sales.

I don't know if the Temple & Webster share price can keep growing in the short term, but sales could continue to do well. It could also be a good year for names like Accent Group Ltd (ASX: AX1) and Premier Investments Limited (ASX: PMV).

Should you invest $1,000 in Altium right now?

Before you buy Altium shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Altium wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tristan Harrison has positions in Accent Group, Close The Loop, Pinnacle Investment Management Group, and Temple & Webster Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Frontier Digital Ventures, Pinnacle Investment Management Group, and Temple & Webster Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Airtasker. The Motley Fool Australia has positions in and has recommended Coles Group and Pinnacle Investment Management Group. The Motley Fool Australia has recommended Accent Group, Close The Loop, Frontier Digital Ventures, Premier Investments, and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

A young woman wearing a red and white striped t-shirt puts her hand to her chin and looks sideways as she wonders whether to buy NAB shares
Opinions

The pros and cons of buying Wesfarmers shares in May

Is this retail giant an appealing opportunity?

Read more »

Smiling man sits in front of a graph on computer while using his mobile phone.
Opinions

2 ASX 200 shares that I think are still bargains after the market rally

These businesses look like attractive opportunities. Here’s why…

Read more »

A young woman looks at something on her laptop, wondering what will come next.
Opinions

Worried about another stock market sell-off?

Market declines don’t need to be too scary.

Read more »

An evening shot of a busy Times Square in New York.
Opinions

The pros and cons of buying US-focused ASX ETFs in the current environment

In a short amount of time, the US share market has erased the declines that it went through at the…

Read more »

I young woman takes a bite out of a burrito n the street outside a Mexican fast-food establishment.
Opinions

Time to cash in your gains? Brokers say sell on these 3 ASX 200 shares

Experts say these stocks are overvalued and it may be time to take some profits off the table.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Opinions

Here's what I'd do after the big ASX stock market rally

The US and China are working towards a trade deal.

Read more »

Two hands being shaken symbolising a deal.
Opinions

2 ASX 200 shares I'd buy after the US-China tariff deal

These stocks look appealing to me right now.

Read more »

A businessman hugs his computer and smiles.
Opinions

2 ASX 300 shares I plan to own forever

Both of these businesses have good ultra-long-term outlooks.

Read more »