Judging by the comments from most analysts and commentators, global equities remain the place to be and equity markets are still doing well. This is certainly true if you look at Japan, but in general it is not exactly correct.  On a 1 month basis, even the otherwise resilient S&P 500 is now flat and many stock markets are down significantly. Indeed, despite widespread investor optimism we are now seeing broad based weakness on a monthly basis.

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Many key global equity markets are holding on to substantial gains year-to-date, but outside Japan and the US, YTD returns are starting to falter.

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Growth remains low and central banks will have room to ease more. Overall however, we stick to our general theme that sector/country rotation and a more selective strategy is needed to grind out returns. Global beta as a whole is unlikely to offer much in the coming months.

However, investors are unlikely to find much salvation in bonds either. After such a strong move up in equities in 1Q13, one would have thought that yields would have rallied to offer an opportunity to tactically rotate into government bonds. But you would be wrong.  A bear steepening trade was the perfect intellectual counter point to strong equity moves into 2013 but instead, if anything, we got a bull flattener! In a world where yield is the new buzz word, bonds and equities can go up together. It remains to be seen whether that also holds to the downside.