The investment environment has been clouded by the spreading European sovereign debt crisis, sluggish US growth and the lack of effective policy. Emerging markets, on the other hand, are seeing strong growth.  Rising inflationary pressure and overheating remains a concern, however. As Richard Jerram, Chief Economist of the Bank of Singapore, pointed out at the Morningstar ETF Intelligence conference, without stimulative policy measures, the developed economies are in danger of stagnating.  Global growth will, consequently, be driven by Asian economies, but the risks now are greater and more numerous than before.

Economic data attests that the US economy is struggling, stifled by politics and regulation, and cautious consumer spending is weighing on US growth.  Even so, Richard Jerram expects the US to avoid a double-dip recession, with falling energy prices and Japan’s supply chain providing optimism amid the gloom.