Global stocks finished 2022 on a stronger footing, bringing some much needed relief to investors after a bruising year as a whole. The MSCI World index fell by 18% during 2022 with the MSCI EM benchmark a further 2% behind.

The war in Eastern Europe coupled with higher inflation and the subsequent global tightening cycle by central banks were understandably the main drivers of investor woes. Aside from the safe haven of the US dollar and commodities, there were very few places to hide as bond markets were also roiled with volatility and sharply rising yields.

2022 started on weaker footing as investors reacted to a more hawkish US Federal Reserve, even before the war between Russia and Ukraine. The resulting commodity
supply shock, and an increasingly challenging environment for central bankers, as high inflation proved less transitory than hoped, set the tone for much of the year.

Despite the broader weakness in equities, the year was notable for multiple periods of sharp upward moves in markets followed by reversals, largely driven by shifts in short term sentiment regarding policy pivots from central banks.