Many industry experts claim the surge in prices is purely down to the stimulus packages from the world’s central banks instead of any fundamental macroeconomic improvements, and have predicted a sell-off in the market when the effects start to wear off. However Podger, who manages the Fidelity Global Special Situations fund, says that more economically sensitive areas of the market have been quietly de-rating recently, while defensive stocks continue to lead the charge.
"There has been a huge divergence between defensives and cyclicals," he explained.
"There has been a very positive alpha effect in traditional defensive stocks and they have been re-rated upwards."
"But underneath the robust general market, there has been a correction in cyclical prices."
"For instance, in the first quarter of this year emerging market equities were down while the the US keeps getting marked up and up."
"At the end of April we were still seeing negative numbers out of the likes of China, Korea and Brazil and the likes of tech, healthcare and material stocks have all been down."
Podger says this represents a break in the pattern of market behaviour that had been constant since the financial crisis.
"Over the last year, we have seen one of the biggest changes as there has been a complete departure from the market pattern that has been in place since 2006."
"In 2007 we expected some sort of downturn, but it actually turned into a full-blown crisis."
"Between 2007 and last year there had been a very solid correlation between defensives, commodities, emerging markets and the general world index. However, that has obviously changed."
"Subdued economic data coming out of the emerging markets has been one of the factors; however, the more positive news is that the markets are not just reliant on the Chinese economy, which is encouraging."
The manager still expects a more general market correction at some point, albeit not necessarily a serious one.
"It is very difficult to relate what will happen from here," he said.
"Markets have gone up a lot and it would be natural to expect a more general pull-back."
"I think in this low interest-rate environment, there is still relative valuation support for equity markets over the long term."
"Can we expect a market set-back? For sure, especially as it is normally chaotic around the summer months as markets lack leadership," he added.
Podger has managed the £1.5bn Fidelity Global Special Situations fund since March 2012, having previously run global portfolios at Threadneedle and Investec.
According to FE Analytics, the fund has underperformed against the IMA Global sector and its benchmark – MSCI AC World index – over three and five years.
However, the manager has begun to turn the fund around.
Over one year it is a top-quartile performer, with returns of 32.48 per cent, beating the sector average by 6 percentage points in the process.
Performance of fund vs sector and index over 1yr
Source: FE Analytics
Earlier this year Podger told FE Trustnet that he was confident of a market correction, saying the rally was caused by the January effect, where investors start the year in a more bullish frame of mind.
He says it is hard to see any one reason why a more general sell-off has not occurred, but that the relative attractiveness of equities to bonds has held up strongly.
"I must admit that the strength of the rally has been surprising," he said.
"In the fourth quarter last year, markets were getting used to the two biggest uncertainties – the Chinese leadership and the US’s fiscal position. Also, we were seeing some pretty poor rates of economic growth."
"However, instead of markets staying neutral, they kept going up. Equities still look very attractive in a world where interest rates and bond yields remain so low," he added.
"At the margin, I would agree as stocks have been significantly re-rated and maybe those companies’ earnings forecasts may not warrant such high share prices," he said.
Certain defensive equity sectors have done particularly well, the manager notes.
"I try to balance this within the portfolio and have tended to ignore consumer staples and it is the smallest position – compared with our benchmark – that we have in the fund at the moment."
"I just think I can find better value opportunities elsewhere."
Podger has three buckets within his fund, the first of which comprises companies that have witnessed corporate change.
The second is "exceptional value" companies, which tends to lead him towards more cyclical firms.
The final bracket within his fund is "unique businesses", which Podger says is usually made up of more defensive names.
Podger’s largest sector weightings are to consumer discretionary, financials, information technology and healthcare stocks.
Some of his largest individual positions are Google, Walt Disney Holdings and Sanofi.
Fidelity Global Special Situations has an ongoing charges figure (OCF) of 1.71 per cent and requires a minimum investment of £1,000.