“These breakthroughs could push up market valuations towards their equilibrium. We have therefore adopted more a more aggressive stance and raised the level of equity exposure in our global funds. With the reversal underway in Chinese monetary policy, we believe that the Chinese stock market will make up for lost ground, at least in relative terms,” the firm said in a regular update on its strategy.

The firm said it has also raised exposure to sectors in emerging markets benefitting from consumer spending. That area of activity accounts for 37.3 per cent of Carmignac Gestion’s assets, an increase from its previous share at 34 per cent.

Carmignac Gestion has also raised exposure to energy, and maintained its holdings in the gold mining sector. Any recovery in the US economy should be positive for the energy sector, the firm said. Meanwhile, central bank injections of money to stave off stagnation create inflationary risks, which benefits gold.  

In the case of non-government debt, the French wealth manager said corporate bonds have value and should be a “major source” of performance for the bond component of its portfolio this year.

The European Central Bank’s three-year credit facility, it says, has “eased volatility and should boost investors’ appetite for risk”. “Meanwhile, companies’ fundamentals remain solid owing to the prudence of firms on both sides of the Atlantic,” it said.

It is more cautious about European sovereign debt, given concerns about a viable solution to heavy public debt in the eurozone.

“We are holding onto US bonds for their safe haven appeal,” the firm said, adding that it intends to “selectively” increase exposure to emerging market sovereign debt.

We plan to rebuild our emerging market government bond holdings through selective investment. As inflation indices fall, allowing further cuts in interest rates, the environment should gradually begin to favour emerging local debt.

Carmignac Gestion added that it will continued to have a “low” euro exposure and believes that currency will continue to fall versus the dollar and yen, and at a quicker pace.

Maintaining low exposure to the euro: "In an environment where European monetary policy is bound to become more expansionist, we believe the euro’s depreciation relative to the dollar and yen will soon pick up pace," the firm said.