February’s investment market commentary

February was dominated by the invasion of Ukraine by Russian armed forces. The ongoing situation, combined with mounting economic sanctions on Russia, has seen global markets start to price in the economic impact of a protracted conflict.
Published 9 March
2 mins

February was really dominated by the invasion of Ukraine by Russian armed forces. This move, which has been internationally denounced, shows President Putin clearly wants more control over countries that border Russia, and fears Ukraine joining NATO. The extent he will go to achieving this is impossible to know. However, the brave defence by Ukrainian population and the broad economic sanctions imposed on Russia by the West suggests that it is already proving to be longer and more costly than Putin would have initially calculated.

Global markets, toward the end of the month, started to price in the economic impact of a protracted conflict, which is primarily higher inflation (through higher energy prices) and lower growth (via a disruption to trade and output). While Russia is not a very large part of the global economy (2% to 3% of global GDP), if energy supply from Russia to Europe (roughly 40% of natural gas used in Europe comes from Russia) this would obviously have a bigger impact on global growth. The increased uncertainty reduced the markets expectation of the extent and speed of monetary policy tightening this year.,

Global equity markets were down on the month (-2.6%), with areas such as Europe-UK (-3.1%) which are economically more exposed to the Russia-Ukraine situation falling the most. The UK stock market (+0.8%) managed to buck the downward trend as it benefited from its relatively high weight to materials and energy stocks. In terms of style, growth stocks (-3.6%) underperformed the more value / cyclically (-1.6%) orientated equities. This was also reflected in sector performance with higher valued information technology stocks       (-4.5%) falling considerably, while cheaper materials (+2.5%) and energy (+2.0%) sectors rose.

Within fixed income markets, despite the flight to safety at the end of the month the expectation of increasing rate hikes from central banks at the beginning of the period meant there was again no place “to hide” in fixed income. Looking at the detail, global government bonds (-1.0%) and global investment grade credit (-2.1%) generated a negative return over the month, while at the riskier end of the spectrum global high yield (-2.1%) and emerging market hard currency debt (-5.5%) also declined as spreads widened.

In terms of real assets, property markets generated an equity-like return over the month with the global REITs index down -2.4% over the period. Commodities (+6.2%) were up sharply, led mainly by crude oil (+9.5%) and agriculture (+8.9%) as a result of supply concerns due to the war between Russia and Ukraine, although gold (+5.8%) also jumped higher due to related risk-off fears.

FTSE 100 7464.37 7458.25
DJ Ind. Average 35131.86 33892.60
S&P Composite 4515.55 4373.94
Nasdaq 100 14930.05 14237.81
Nikkei 27001.98 26526.82
£/$ 1.3447 1.342
€/£ 0.83528 0.83608
€/$ 1.1235 1.1219
£ Base Rate 0.25 0.50
Brent Crude 89.26 97.97
Gold 1797.17 1908.99

This month’s values quoted as at 28/02/2022. The above values are sourced from Bloomberg and are quoted in the relevant currency.

Clients of Nedbank Private Wealth can get in touch with their private bankers directly to understand how their portfolios are responding to market events or call +44 (0)1624 645000 and speak to our client services team.


If you would like to find out more about how we help manage clients’ investments, please also contact us on the number above. Or you can get in touch using the links to the forms towards the end of this page.

Investments can go down, as well as up, to the extent that you might get back less than the total you originally invested. Exchange rates also impact the value of your investments. Past performance is no guide to future returns. Any individual investment or security mentioned here may not be suitable, and is included for information only and is not a recommendation. You should always seek professional advice before making any investment decisions.

about the author

Tom Caddick

Tom Caddick

Tom was appointed in March 2021 and brings to the table over 20 years’ investment experience. Prior to joining, he was at Santander Asset Management in London for nine years, where he was, most recently, the chief investment officer for its UK business, having previously been the global head of the multi asset division. Tom also spent several years as head of multi manager and fund selection at LV Asset Management.

Tom sits within Nedgroup Investments, a sister company, which provides investment advice, research and portfolio modelling solutions to Nedbank Private Wealth. Here, he heads up the London-based investment team. It is in this capacity that he is a member of Nedbank Private Wealth’s investment committee.

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