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INSIGHT FTSE 100 in 2011


Value of the FTSE 100 index


6300 6100 5900 5700 5500 5300 5100 4900 4700


Choosing an investment manager in turbulent times


Seesawing markets can skew the performance of investment managers, making it difficult for investors to select the best. Tom Hill of UBS Jersey recommends looking beyond mere performance


36 businesslife.co February/March 2012


and economic landscape, like the Arab Spring and the stuttering progress of core Europe towards full economic and political integration. This led to extraordinarily volatile financial


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markets. Here, ‘volatile financial markets’ is not a euphemism for shares going down – it means that on average, daily fluctuations in securities prices, both up and down, were very large. The above charts show the distinction: on the left we see the big fall in the FTSE in July, since when share prices went up. On the right,


NVESTORS HAD TO make financial decisions in 2011 in the face of a remarkable series of events. These ranged from the literally earth- shattering – the Japanese tsunami – to those that changed the political


historic volatility (specifically, standard deviation of daily returns over the previous 20 trading days), which rose dramatically in August and stayed high. While the US economy continues to


recover, albeit at a frustratingly slow pace, and China has slowed, these trends are more or less as expected in the context of relatively coherent monetary and fiscal policies. But the outlook for the European economy depends on political decisions that can’t be predicted with much confidence, and whose implementation is, in any case, uncertain. For equity markets in particular,


expectations for economic growth that oscillate between recovery and slump lead to securities prices that switch between greed


Japan’s tsunami: 11 March


Greek default “almost certain”


15 december 2010 12 january 2011 9 february 2011 9 march 2011 6 april 2011 4 may 2011 1 june 2011 29 june 2011 27 july 2011 24 august 2011 21 september 2011 19 october 2011 16 november 2011 14 december 2011


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