Will there be more global volatility?

Despite geopolitical events that rattled markets last year, there’s been relatively low volatility.

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As a result, there could be some catching up throughout 2015, says Nick Langley, investment director and senior portfolio manager of RARE Infrastructure in Sydney, Australia. He manages the Renaissance Global Infrastructure Fund.

Due to “movements in the prices of oil and other commodities,” he adds, “we’ve seen great volatility that has flowed through to the currency markets, but not yet to equity markets. So that’s something we could see during the course of 2015.”

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Langley is also monitoring political moves being made in Europe. There was a recent federal election in the U.K., he notes, which could affect growth prospects in Europe.

In his view, the monetary policy moves of the ECB may not be enough to support a full recovery, so “the [ECB] needs politicians to step up with strong fiscal policies.”

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A look back at 2014

Of the many surprises of 2014, low bond yields were the biggest for Langley. “Going into 2014, everyone was expecting bond yields to track up, [but] the reverse happened.”

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The main reason that occurred was several central banks entered easing phases—namely, the European Central Bank and Bank of Japan. But, going forward, Langley predicts the U.S. Federal Reserve will start moving interest rates up in 2015, which will lift bond yields.

Read: The case for global bonds in a low-yield world

The drop in oil prices also surprised Langley. “There was an interesting dynamic on the supply side, where supply was taken out of the Middle East and North America, mainly due to geopolitical concerns. But, at the same time, supply increased in North America, and that held the market in balance.”

On the upside, low gas prices boded well for global infrastructure growth, and that will continue. As more goods moved around last year, there was increased activity for infrastructure assets, including railroads.

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