Analysis

Looking back over the past decade, the performance of emerging markets has brought approving comments from even the most hardened critics.

For some time we have primarily focused on defensiveness which has proved pertinent in terms of performance.

At the start of 2009 markets were in freefall, there were concerns about financial and economic meltdown and the last place you wanted exposure to was smaller companies with their higher risk and greater exposure to the domestic economy.

Commentators get hooked on equity market index levels.

Smaller companies sector has significantly outperformed other IMA European fund sectors over past 12 months

We are actively seeking exposure to the media sector.

How do the runes read? As a result of cutting costs and maintaining prices, companies are continuing to show better cashflow.

Following unprecedented government intervention, the US equity market has rebounded over 70% from lows experienced less than year ago.

Anyone remotely optimistic about prospects for global equities over the next 15 years simply cannot avoid, or significantly underweight, US equities.

Let us enjoy the equity sweet spot for now. Interest rates are likely to remain low for some time as the recovery remains fragile.