While 2016 was dominated by the Brexit vote, Donald Trump's US Presidential Election victory and Italy's referendum, fund managers have warned geopolitical risks remain high in 2017 - particularly in Europe.
France
However, for most investors, Le Pen is the biggest threat to the stability of Europe.
She has been vocal about wanting France to leave the EU and although there are structures in place which prevent the president from calling a referendum without going through parliament, a Le Pen victory would cause much uncertainty across financial markets.
Toby Nangle, manager of the Dynamic Real Return fund at Columbia Threadneedle, said: "A Le Pen victory would pose an existential threat from the markets' perspective on the single monetary project. The web of financial interconnectedness would certainly come into question.
"There is a large amount of uncertainty, which is why the idea of France exiting the eurozone is something financial markets will associate with extreme amounts of volatility.
"However, if Le Pen were president she does not have the power to take France out of the EU. There are several more hoops to be jumped through if this was to occur."
Investor jitters about the impact of the upcoming elections have been felt in sovereign bond markets in recent weeks. In early February, the yield spread of French 10-year bonds over German bunds widened by 79bps; the biggest gap since 2012.
Nicola Mai, portfolio manager and head of sovereign credit research in Europe at PIMCO, commented: "While French and Italian government bonds have already sold off, they could lose further value heading into the French election and amid lingering political uncertainty in Italy."
Reasons for optimism
However, despite political storm clouds ahead for Europe, investors are more optimistic about economic data coming out of the region, and the fact equity market valuations look attractive compared to developed market peers, as much of the political risk has already been priced in.
European equities underperformed developed market counterparts in 2016, with the Euro Stoxx 50 and CAC 40 up 10.4% and 4.9% respectively, compared to the FTSE 100 and S&P 500, which rose 21.5% and 19%.
As of 30 December 2016, developed European equities were sitting on a cyclically-adjusted P/E ratio (CAPE) of 16.6 compared to the US on 26.4, according to Star Capital.
Why markets are too pessimistic on Europe
Nick Mustoe, CIO of Invesco Perpetual, said: "The market still has not come around to the idea that European equities are genuinely investable.
"Our view is that politics is likely to be more of a distraction than a disaster. Therefore, volatility around European elections could be an opportunity. The key is being ready to exploit the market anomalies created when political perceptions hijack economic realities."
