Looking ahead, we believe that the withdrawal of liquidity by the Fed may change the current status quo. The emerging markets are already feeling the impact of investors retrenching to their home markets, but it would be foolish to think that the developed world can continue unaffected.
Should the Fed decide to increase the rate of its tapering, or in the circumstance where macroeconomic data begins to point towards interest rate rises before the markets currently expect them, then equity markets are likely to falter.
We continue to favour developed equity and bond markets, which we believe will have the potential to benefit from continued incremental improvements in worldwide economies and markets.
John Chatfeild-Roberts is chief investment officer at Jupiter and head of the Independent Funds Team
