Throughout December, the market continued to be impacted by many of the same trends that have characterised the performance of underlying markets throughout 2015, specifically weak oil prices, the weaker euro, the rising US dollar, and tumbling emerging currencies. The decision by the US Federal Reserve to increase interest rates for the first time in almost a decade represents the beginning of a two-speed monetary policy regime. Many of the broader equity indices ended the year in negative territory having experienced periods of heightened volatility and pronounced style rotations throughout the period.

Performance among the stock selection criteria was mixed in December. The price-driven components within market dynamics performed well, with both industry and stock level signals generating positive returns. By contrast, weak returns were seen in dynamic valuation over the month. The component remains predominantly exposed to quality companies and away from cheap but risky positions. This detracted from performance in a period of slightly more risk tolerance within global markets.