“The trend is your friend. Risks asset continue to be bid up. The first phase of the bull market was mainly a sentiment driven mean reversion market. In the meantime, fundamentals have improved as well, macroeconomic indicators and realised and expected company results. Fund flows and positioning analysis suggest that investors as a group have not heavily participated in this risk rally. Given that money market instruments provide basically no return, the pressure for yield drives investors into risk asset classes. We increase the weighting of our equity allocation at the expense of government bonds.”