Risk back on as investors embrace encouraging news

There was a widespread re-embracing of risk assets during February. Encouraged by the Federal Reserve’s confirmation that interest rates would remain low until 2014 at the earliest, plus further bailout activity in the eurozone, investors globally directed money towards emerging markets, smaller companies and alternatives, and away from money market and government bond funds. However, the rally since the start of the year has now led to some investors questioning whether valuations have run up too far too fast. Go with the flow Globally, flows into emerging market equity and bond...