The year 2020 was a fantastic year for stock trading in China, with the total market cap of the country's stock markets reaching an all-time.

For some time now, we have been highlighting the wide valuation gap between the ‘value' and ‘growth/quality' ends of the market. Earlier in 2020, we suggested that the drivers of this extreme dispersion might be coming to an end and the 2020s could be the decade of the ‘cheap asset'.

As investors adjust for a potential style rotation, we urge them not to abandon their portfolios' “quality compounders” and “transition winners.” Following the shock of the coronavirus crisis, there is a lot of talk of “early-cycle” economic dynamics: higher GDP growth, inflation and interest rates, and revived animal spirits.

The parabolic rise of this stock, reportedly driven by retail speculation, short-covering and options hedging, has reverberated across a number of other stocks and sectors.

If the UK equity market was out of favour at the beginning of 2020, it's even more so now. Until the arrival of three vaccines prompted a wave of market exuberance towards the end of the year, UK equities had fallen approximately 20%. The only two worse-performing equity markets were Russia and Brazil...