The above chart illustrates how various asset classes have performed in 2022 by showing the performance of some of our benchmark funds in each of the main asset classes.
The higher than expected inflationary backdrop and associated interest rate rises meant that bond markets experienced one of their most difficult years in history. Government Bond markets experienced the greatest challenges, while Corporate Bond funds also struggled. The fact that Corporate Bond funds typically have shorter durations than their government equivalents meant their falls were typically less. Inflation Linked Bonds provided some protection relative to broader bond markets, but they were unfortunately not immune to declines. We believe that at these levels, bond market yields are now looking relatively attractive versus recent history and as a result we have changed our house view from an underweight to a neutral position.
Property funds were among the better performers in 2022. Despite the head winds of higher interest rates, Irish Property funds managed to avoid the falls experienced in equities and bonds. UK property fared less well as fears that the UK economy would underperform on a relative basis weighed on their performance in the second half of the year. Despite seeing relative outperformance in 2022, we believe this trend is less likely to persist in 2023 and as a result, our house view is to bring property from an overweight to a neutral position. We continue to remain optimistic for longer term growth prospects for Property assets.
Equity markets were also negatively impacted by higher interest rates and geopolitical tensions. For a large part of the year the weaker euro versus the dollar had sheltered some of the falls in equities however, this currency impact lessened as the euro regained some of these losses in the latter part of 2022. Smaller Company and Emerging Market Equities experienced relative underperformance, while for the first time in many years value outperformed growth as a style.
Heading into 2023, equity market valuations have become more attractive however, volatility is likely to persist in the short-term as markets monitor the impact of higher interest rates and slowing economic growth on company profitability. Our house view continues to maintain a neutral weighting to equities.
Similar to Single Asset funds, Multi-Asset funds struggled in 2022. Most of the building blocks in these funds experienced negative returns however, those funds that were relatively overweight property, inflation linked bonds and commodities fared relatively better. The falls in equity and bond markets have also made Multi-Asset funds look relatively more attractive and our house view has become positive for these types of investment vehicles.