Risk assets rallied in February as global vaccination efforts progressed and economic momentum strengthened. However, the rally stalled in the latter half of the month amid concerns about a resurgence in inflation. Value stocks trounced growth. Small caps outperformed large caps for the sixth consecutive month. Sovereign bond prices declined amid sharply rising yields, while high-yield bonds advanced and bested investment-grade equivalents. Real assets mostly gained; oil prices reached their highest levels in more than a year, but gold declined at its fastest monthly rate since 2016. Among major currencies, UK sterling advanced, whereas the US dollar and euro were mixed.

Global equity markets declined in aggregate in January, but individual markets varied as emerging markets advanced and developed equivalents fell.

The risk rally continued in fourth quarter, bolstered by COVID-19 vaccine progress and multiple new stimulus measures.