Viewpoint

Markets followed a v-shaped path in December, moving lower at the start of the month as fears mounted over the outlook for growth in Europe, before rallying in the lead up to the year end.  The MSCI World Index was 4.1% lower for the month by the 19th of December, but rebounded to close broadly in line, spurred by the enhanced credit operations of the European Central Bank (ECB) and signs of economic strength emanating from the US.

In this month’s Focus we reflect on the wide variations in asset class returns during 2011, with emerging market equities having significantly underperformed their developed peers, whilst equities in aggregate lagged the returns on core developed market government bonds.