Quarterly Letter
2019 was an extraordinary year for most asset classes, and global equities in particular, with the MSCI World Index delivering its third best gain in the past 30 years. Markets climbed a wall of worry, receiving a boost from the January reversal of central bank policy coupled with an easing of two significant risk factors faced at the beginning of the year: Sino-US trade tensions and Brexit. International equities delivered solid returns but were outpaced by US equities and highly priced technology stocks, which led the advance. Unlike the poor market sentiment entering 2019, current bullishness has reached six-year highs, while other measures of risk, including credit spreads and volatility (as measured by the VIX index), have reached levels suggesting unhealthy complacency.
