All major regions and sectors around the globe posted positive returns in the final quarter of the year: MSCI World (+8.5%), MSCI Emerging Markets (EM) (+11.8%) and MSCI SA (+13.1%), in US dollar. The year 2019 was one of the strongest years on record for global equities with the MSCI World Index up 27.6% for the year. The MSCI EM Index (+18.4%), although positive for the year, lagged significantly.

Global equities rallied behind signs of stabilising global growth and moderation in trade tensions between the US and China, who in December announced that ‘Phase 1’ of an agreement had been reached. In the UK, following the Conservative Party’s win in the general election, Prime Minister Johnson’s Brexit policy is set to take centre stage in 2020. The Withdrawal Agreement is likely to be passed, allowing the UK to leave the European Union on 31 January 2020 with a pledge by the prime minister to not prolong the transition period beyond the end of 2020.

Bond yields in developed markets rose steadily during the quarter with the benchmark US 10-year bond yield rising from 1.66% to 1.92% while the yields on the German 10-year bond became less negative, rising from -0.57% to -0.19%. Commodities were generally higher at the end of the quarter. Brent crude rose 11.5% to US$66.4/bbl, after a deepening of the OPEC/OPEC+ production deal. Gold was slightly higher (+2.6%), closing at US$1 517/oz and palladium gained 10.1% to end at US$1 946/oz. Base metals also gained with copper up 8.6%.