Not only did global equities have a fantastic month, but there was a switch from growth to value as the dial of confidence in global economic recovery switched from low to high. Investors who had been comfortable paying up for the safety of growth switched allegiance. With the outlook looking bleak, the market had sold down economically sensitive companies since the outbreak of the pandemic. Suddenly value stocks were all the rage, especially as the gap in valuations between value and growth was as stretched as it had ever been.
What did this mean in terms of actual market moves? The 18.4 per cent return of the Russell 2000 best demonstrated the switch from growth to value. That compared with 11.8 per cent from the Nasdaq. Where the US goes the rest of the world follows, so in the UK the best stocks over the month were the most beaten up. International Consolidated Airlines (IAG), owner of British Airways, was up 60 per cent, Rolls-Royce (RR) 48 per cent and Royal Dutch Shell (RDSB) 33 per cent.