12 themes that shaped 2011

We look at key themes and events that have impacted investment over the past year.

No-one can dispute 2011 has been an eventful year for financial markets, and even the most hardened bottom-up stockpickers have had to rethink the influence of top-down macro events on their portfolios.

Against a backdrop of the eurozone debt crisis, the survival of the euro hanging in the balance, a devastating Japanese earthquake and whipsawing shares and commodity prices, it has been a challenging year for investors.

Meanwhile the asset management space has seen clampdowns on certain types of investment, the threat of a bigger regulatory challenge than RDR, and a wave of takeover activity.

Here we round up 12 of the key themes and events that shaped 2011. 

 

ONE Arab Spring A wave of revolutions across the Middle East toppled dictators and caused shockwaves for global markets. There were civil uprisings in Tunisia, Bahrain, Syria, and Yemen as well as protests in many other Arab countries.  Oil prices soared as the crisis erupted, threatening supplies from Libya, the world’s 12th largest oil producer.

TWO  Asset management 2011 was a big year for UK asset managers, with a wave of takeovers and rebrands changing the landscape of the industry. Henderson’s purchase of Gartmore was officially finalised in April, while F&C completed its takeover of Thames River in September. LVAM handed £8bn of assets to Threadneedle in an outsourcing deal. Meanwhile Barry Norris’ European boutique Argonaut became independent from joint venture partner Ignis in August, and Aegon AM changed its name to Kames Capital.

THREE  Commodities Gold reached several fresh highs throughout 2011 as investors flocked to the ultimate ‘safe haven’ asset amid rollercoaster markets and macro uncertainty. It hit a record high of $1,911 per troy ounce in August, prompting bubble fears. Holdings in exchange-traded products backed by gold reached a record 2,350.8 metric tonnes in November, valued at $127.4bn. Meanwhile civil unrest in the Middle East drove up the price of oil on supply fears, with Brent Crude peaking at $127 a barrel in April.

FOUR Currencies The Swiss National Bank pegged the Swiss franc to the euro in a bid to curb the soaring currency. The franc climbed to US$1.30 as investors sought shelter from the sovereign debt crisis, prompting the authorities to step in. In December the euro, which had remained fairly resilient throughout the debt crisis, fell through the crucial $1.30 mark to its lowest level since January.

FIVE Europe The biggest story of the year was of course the European debt crisis. Greece requested EU and IMF aid in 2010, triggering a series of events in 2011 that rocked global markets and threatened the future of the euro. The latest twist in the tale came as UK PM David Cameron vetoed a new EU treaty, saying he wanted to protect Britain’s interests.