2020 began with a sell-off across risk-assets, and just like previous crises, market panic was short-lived. The extreme moves between January and March benefitted mean reversion strategies - a theory that asset prices and historical returns will eventually return to their long-term average. 
Our successful macro calls were the result of identifying extreme price moves that could return to historical ranges within six to twelve months.

Long precious metals was the standout call this year. The global pandemic triggered a rise in global equity risk premia, which supported a rise in gold and silver. We were also long Chinese equities coming off the initial wave of the crisis. Our call to go long the S&P 500 in March was especially timely, although holding onto losing energy positions offset these gains. 
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Spotting these extremes placed us ahead of a rotation to inflation sensitive assets. And after the October 31 close, we saw a sharp boost in small-caps and value versus growth stocks. A recovery in bond yields will help narrow remaining divergences across sectors and regions into 2021, which we’ll explain in the market outlook section.

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