"Therefore, our belief is that earnings estimates for the more cyclical areas of the equity market are too high and that the current bullish sentiment is likely to be tested over the next 12 months. At the same time, we believe that interest rates are peaking, and valuation pressures should ease.
"Given that the American Growth strategy is tilted towards less cyclical growth companies, we expect both of the above trends to be beneficial over time."
The French election has shown that high debt and political fragility can be a toxic combination, and can mean that politics exerts a greater influence than it might otherwise.
Bond markets will be in the firing line, but some equity sectors will be vulnerable as well.
Darius McDermott is managing director of Fund Calibre and Chelsea Financial Services
