In our latest quarterly review of global equities, Barings suggests some areas of the market are becoming expensive and investors should reassess their strategies. We believe technology stocks, which have been standout performers (see graph), especially during 2017, are beginning to look expensive relative to other areas following an extensive period of outperformance. More generally, the global economic outlook points to growth, but there are potential challenges that could cloud the horizon.

The technology sector now consists of stocks trading at the higher end of historical ranges. Investors should now consider their options. High quality, defensive growth sectors are beginning to look more attractively valued than they have for many years, which may prove to be a compelling investment opportunity. I am convinced that there are quality investment opportunities in other sectors that are reasonably priced and offer attractive growth prospects.

However, the growth outlook for the tech sector remains positive, particularly in relation to the software & services and e-commerce sub-sectors. In the event that valuations moderate, I would still look to add further to tech companies for the portfolio.

I expect moderate global economic growth to continue in the second half of 2018. My confidence is based on perusing leading indicators, such as the JP Morgan Global Manufacturing Purchasing Managers Index, which have been declining but continue to signal economic growth. However, my colleagues at Barings suggest that there are some risks that have the potential to undermine global growth. Tightening monetary policy concerns some investors, while unemployment is also very low in many economies, particularly in the U.S., and this is bringing higher inflation in some areas. However, I have no reason to believe that this is a widespread phenomenon.

The potential for an escalation of ongoing trade tensions into a full-fledged trade war is another potential risk to be mindful of, and it continues to cast a shadow over global growth. Fortunately, the companies in which we invest are largely isolated from the negative impact of trade tensions.

In this era of rapid innovation, with the emergence of large numbers of enabling technologies such as cloud computing, smartphones, electric and autonomous vehicles and e-commerce, there's a multitude of investment opportunities.

While these new technologies are creating investment opportunities for the providers themselves, it is also allowing entire industries to redesign the way in which their goods and services are delivered. We expect this trend to continue, and look favorably on those companies that are successfully harnessing these technologies to drive earnings growth and capture market share. We believe there are numerous potential growth investments in this area.