Emerging markets, banks and Japan are the three areas investors should look to take advantage of in the short-term, according to The Adviser Centre chief investment officer Peter Toogood.
This, he said, was due to the high debt burden forcing bond yields lower and investors fleeing to equities forcing the price ever higher.
Having already outlined a long-term portfolio, dominated by technology, smaller companies and Indian funds, below Toogood looks at a portfolio for the ultra-short term.
The first area he suggested is Japan, though he noted that it is not the perfect place to invest.
“The one that’s interesting there is you still have a relatively large number of stocks that are quite cheap and have got a higher focus on RoE [return on equity],” he said.
“It’s not perfect but they are looking at profitability rather than anything else, whereas before it was about ‘make the latest Nintendo-something and we might sell some’.”
He said that this mentality had been the way of thinking for much of the last 20 years, which has seen returns in the region held back as companies have focused less on returns and more on innovation.
“So there is more of a focus on that – I wouldn’t say it is perfect but its better,” Toogood said.
This is coupled with cheap valuations which should see the market continue to perform well in the short-term.
In the region, Gill Hutchison, research director at The Adviser Centre said the firm would recommend the £1.7bn Man GLG Japan Core Alpha fund run by Neil Edwards, Stephen Harker and Jeff Atherton. 
The four crown-rated fund, has a value tilt, according to Hutchison, which plays well into the Japanese market, which tends to suit these strategies more than the growth style.
She said: “Japan has been different because to make money out of Japan you‘ve really had to have more of a value approach for a long time now and stylistically it always does something different to the rest of the world.
“I quite often write what it’s been like over the month whether it’s been a growth or a value month and in Japan it is always the reverse.
“Man GLG Japan Core Alpha is quite a ride but very interesting and if you are prepared to buy it when it is looking very weak you can do quite nicely out of that one.”
For those looking for a less volatile option she suggested the four crown-rated Schroder Tokyo fund run by Andrew Rose.
“They have a very consistent track record relatively speaking and the fund is run by a very highly respected manager,” Hutchison noted.
Performance of funds vs sector and benchmark over 5yrs
Source: FE Analytics
Finally, for those looking for a growth bias, she suggested the Baillie Gifford Japanese fund run by Sarah Whitley and Matthew Brett.
“That is different. It’s been doing extremely well and has a degree of consistency about it,” she said.
“If you like the robotics and automation story then they have a lot of that and I think they have a very high tech weighting but it’s quite granular when you dig into it.”
However, Japan is not the only area where the advisers are seeing value, with the emerging markets also offering potential for short-term investors.
Specifically, the pair suggested countries with restructuring opportunities that are currently on cheap valuations.
The first is Korea, which Toogood said is a really interesting country that to the corporate governance changes it is currently going through.
“I think finally they’ve realised that perhaps family-run companies aren’t the big thing in town and therefore I think it is genuinely quite interesting,” he noted.
“It’s been going up so it is being recognised by the market and it is the value play in emerging markets at the moment.
“There is an outside chance that the operating model is not about how many washing machines they sell or how many computers they shift out the door,” he said, adding that companies are focusing more on development and research.
“It is a value play on the genuine restructuring in the country not on a cheap valuation basis,” Toogood noted.
The other area is Argentina, which has been an unloved country for many years but appears to be at a turning point.
“The country has been in the toilet for 25 years but the government is performing miracles there,” he said.
“[President Mauricio Macri] is not likely to be overthrown in the coming weeks because he’s not corrupt so as a value opportunity it is a really interesting one.”
He added that within the emerging markets, it is usually these type of countries that do very well for a year or two unexpectedly.
“Last year you had to own Russia and Brazil, the year before you basically had to own China. Global emerging markets is conceptual because there are so many different cycles all at ones,” he said.
Within this, Hutchison said investors could buy the Baring Korea Trust fund, though she noted that the firm does not have a rating on it and would therefore not be able to comment on the fund specifically.
For a more generalist approach, she suggested the Lazard Emerging Markets fund run by James Donald.
“It is interesting to the degree that he is more willing and able to court danger if you like,” she said.
“When Russia was really under the cosh he was in there quite early. When Brazil was really under the cosh he was in there pretty early. So that’s interesting for picking up areas in a recovery situation because he is very value aware.”
Performance of funds vs sector and benchmark over 10yrs
Source: FE Analytics
The fund has been a top quartile performer over the last 10 years, returning 98 per cent to investors, though has struggled more recently.
From a sector standpoint, the only area that still looks cheap is financials, with many value managers with high weightings to the sector.
“Sectorally, if we go global there is very little that looks inexpensive and therefore you go financials – it’s the last gig in town. And that’s pretty much it,” Toogood said.
“In the US they are getting expensive you could argue some of the Asian banks are still cheap, UK is not bad and European banks are okay-ish so the only sector you can go is financials.”
He said that this is more likely a winner if there is a market correction in the coming months, with banks and financials likely to fall less than some of the overpriced areas of the market.
“This could be a case that it falls the least as opposed to goes up the most – that’s my own personal view because nobody owns them anyway,” he said.