The table shows returns broken down by asset class and geography but this time in sterling. Currency has been a boost for some overseas markets, notably Europe, but not for the US as the dollar weakened in the second half of the year finishing 3% down against sterling for 2020 as a whole.

The following table, with data courtesy of JPM Asset Management, shows the winners and losers in terms of industrial sector and style:

My gosh, we are in the middle of the most dreadful time most of us have encountered but no-one bothered to tell the financial markets with both bond and stock markets, notably Wall Street and Asia, producing strong returns and making new all-time highs. Sadly, it was the home team which let the side down with the battered FTSE Index down by 12%. Brexit and our rather shambolic response to the pandemic didn’t help of course but global market returns last year were more about style than geography, as the JP Morgan table illustrates showing a massive divergence in sector returns. 

In times of recession investors look for growth so the US and Asian markets with their high weighting in the technology and e-commerce sectors produced double digit gains whereas the European markets with their exposure to the ‘value’ cyclical industries like autos and chemicals struggled as did the UK with its oil majors, miners, banks, travel and leisure stocks. In short, we had none of the winners and all of the losers. If you’re scratching your head about consumer discretionary then the answer is that it includes online retailing, Amazon in other words! The value squad had a notable bounce in the big ‘risk on’ rally in the last quarter as the economic outlook looks brighter in a world of mass immunisation. However until a sustained recovery in global growth looks likely, and with it rising interest rates and bond yields, a long-term reversal of the decade trend of growth outperforming value looks unlikely. Our sense is that the two styles will sit much closer together this year rather than at opposite ends of the classroom

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