In an emissions-constrained economy, natural gas is often viewed as a more environmentally friendly alternative to coal. It produces half the carbon dioxide on an energy-equivalence basis and contains almost none of the heavy metals that are typically associated with coal. Accordingly, natural gas is a significant and growing source of electricity in North America. We expect this trend to continue as a result of plans to shut down coal facilities over the next decade and concerns over the safety of nuclear power, particularly after the Japanese nuclear crisis. Despite the perceived environmental benefits of natural gas, however, opposition to a relatively new process for extracting the resource – known as hydraulic fracturing, or “fracking” – is growing in North America and Europe.
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Since 2008, investors have faced volatile financial markets, buffeted by fears of sovereign debt default, inflation expectations, currency debasement, and slow growth in developed economies. And yet, one bright spot has remained constant through these tumultuous times – resources. Skyrocketing demand from emerging market countries for key resources like oil, coal, and copper and depleting supplies bode well for commodity prices in the years to come.
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Despite a debt crisis in Europe, government austerity measures, and currency wars, the performance of global stock markets turned in a respectable year. The MSCI World Index was up 5.3% in the fourth quarter and up 6.8% in 2010. The theme of small-cap outperformance continued. The Mawer Global Small Cap Fund returned 8.0% in the quarter and 16.3% in 2010.
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