Emerging markets provide the only equities value

How has your asset allocation changed recently

We are consistently long risk assets, both equity and credit. We’ve been positive on European equities for two years and underweight government bonds. But in early 2014 we began to scale down the level of risk.

We are still long risk but we are buying hedges on equities we think are too expensive. That’s especially true for the US market.

Are you bearish on US equity valuations

I’m not negative but the expected returns on US equities will be in the mid-single digits, say 5%-6%

In late 2012 we shifted to...