2022 has been dominated by further concerns around rising inflation and heightened geopolitical tensions surrounding Ukraine. Inflation has risen to levels not seen in most developed markets for 30 years and, to combat this, central banks are guiding towards much faster rate rises than markets had previously expected. This has led to rising bond yields and falling bond prices. In equities, higher valuation stocks (quality/growth companies) have been hit harder than cheaper companies, partly because growth companies have more of their value based on profits far out in the future which become less valuable when compared against the certainty of higher rates now. Lastly the tension between Russia and the west over the Ukraine has driven risk-off sentiment and sent oil prices higher, which has supported valuations of cheaper energy stocks. Follow this link for more detail on events which transpired in the month.

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