David Jane, the manager of Miton’s multi-asset fund range, says 2016 is proving challenging for any investor trying to second guess the market, with sentiment swinging from discounting a high risk of a global recession to believing that it was all a storm in a tea cup.

“At times like these we are minded to feel grateful that we are not relative investors as those strategies which seek to beat a benchmark have experienced a huge rotational pain trade,” he says.

“Those areas most weak in the early part of the year have now rallied to a huge degree, while the previously defensive areas have lagged in relative terms. Hero to zero and vice versa in a very short space of time.”

As such, having reversed the heaviest declines of the early part of the year, Jane says the big question facing investors right now is what will happen next to the so-called riskier assets, of which emerging market equities falls into.

Jane says: “Certain areas which we favour over the longer term we have avoided in recent times, whether emerging markets or certain industrial areas, as the broad macro environment has been unsupportive. While we wouldn’t necessarily feel that these headwinds have reversed we can certainly say they have abated, removing one negative factor and allowing us to get involved again.”

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As a result within the Miton multi asset range Jane has been increasing the fund’s exposure to emerging markets at the expense of some of the developed market equity.

“In addition, we have also been buying back into certain industrial cyclical companies which we favour longer term but have been suffering over the near term,” he says. “In particular, those with exposure to global trade, commodities or China have had significant headwinds which are now reducing. Some of these businesses are highly attractive in the long term on our thematic approach so it is nice to have an opportunity to reintroduce them to the portfolio.”

He adds: “As ever, we are pragmatic and the market could well take another lurch downwards, particularly as we enter the summer lull, in which case corrective action may be necessary. In the meantime we are pleased unit holders are able to benefit from a more positive tone.”