Non-valuation drivers are now the key to investment decisions

ASSET ALLOCATION

Equity markets started 2010 brightly, with the MSCI World Index posting its strongest first quarter performance since 2006.

An indication of support for Greece, from members of the eurozone, and improvements across both the manufacturing and non-manufacturing sectors, proved positive. However, this disguised a fairly bumpy ride throughout the period. Yields remained steady in fixed income markets, as the threat of inflation remained muted and a rise in interest rates was not expected until the second half of the year. However, a nervous uncertainty returned and currently prevails across markets. While global economic data is supportive in the main, sovereign debt issues serve as a reminder that problems persi...