2016 was a dramatic year for the world’s financial markets. The year started with collapsing oil prices, fears of recession and deflation, equity markets falling sharply and investors favouring bonds and “expensive defensives”. By the end of the year we had rising oil prices, renewed optimism about the United States (US) growth and inflation, cyclical equities rallying, bonds selling off and defensives falling out of favour. In between we had on again/off again OPEC deals, elections and Brexit. The solid overall returns recorded by a number of asset classes in 2016 mask considerable within-year volatility and within-market sector rotation.