Brexit is like bird flu

Mr Thomson thinks Brexit (a UK exit from the European Union) is just like bird 'flu - in a good way. He says: "When you are in the moment you think these things are the only things that matter. But think about Sars, bird 'flu and Greece leaving the EU. We thought it was the end. But almost every geopolitical or health event in the past few years has been a buying opportunity.

"I haven't changed my UK weightings and in any case some of the best companies I see in the world are here. Rightmove (RMV), Associated British Foods (ABF), which owns Primark, and Dignity (DTY) are incredible businesses - they will be good businesses in or out [of the EU]."

Mr Thomson favours stocks with sustainable growth characteristics in developed markets, and says quantitative easing (QE) and the move to negative interest rates has pushed money into low-growth income stocks, which do not deserve the premiums they are currently trading on.

"20 per cent of all bonds have negative yields," he says. "Utilities is one of the best-performing sectors and that's not because sectors like utilities have got better." Yield chasing is an issue across global markets as investors are paying through the nose for stocks with income attached which previously would have been viewed as low-growth stocks offering a compensatory dividend."

And an even worse trend has been the transition from yield chasing to investing in 'dog' stocks, he adds. The start to 2016 brought with it a move into higher-risk out-of-favour stocks in the hardest-hit sectors and markets.

"What we are seeing right now is a gut-wrenchingly brutal rotation into sectors with the greatest structural problems," he explains. "So the commodity sector, industrials and a lot of emerging markets are doing well where earnings growth is uncertain. Rotation into the dogs is brutal at the moment and I think that's the greatest headwind we face."

If this combination of investors seeking stability and those seeking risk sounds confusing, it is, he says. But this is a market driven by central bank activity not stock fundamentals.

"Six weeks ago people thought there was going to be a recession and now the market is back up to where it was before that. It's no wonder investors are confused about what's going on."

But the chipper Bermuda-born manager takes a glass-half-full view on many market issues. He says there is plenty in the European and US equity markets to like and he has more than half of his fund invested in those markets. "I'm grateful to Europe for delivering two of my best-performing stocks in the year to date," he says of German oven company Rational AG (Ger:RAAX) and private equity group Aurelius AG (Ger:AR4X).

He also thinks we could be on the brink of better economic news in both Europe and the US. Other managers are bemoaning bleak market sentiment and European Central Bank president Mario Draghi's fast-emptying bag of tricks, but Mr Thomson says: "Everybody is talking about slowdown and deterioration. But what if we are starting to see some of the benefits of QE and low oil prices?"

He says he is still seeing opportunities in Europe as long as he is "selective". And, in the US, he points to the performance of a composite leading economic indicator measure which is holding up against the S&P 500. This composite indicator comprises the ISM Manufacturing index, the NAHB housing index, consumer confidence and emerging markets purchasing managers' indices (PMI).

"Normally, ahead of market collapse you see indices head down, but we are not seeing that now," he adds as evidence that pessimism is misplaced.

US investors should be feeling happier than they are, he argues, as only 25 per cent of savings in America are being spent. He continues to like the US - despite a certain presidential candidate being "an embarrassment". However, Rathbone Global Opportunities Fund's 44 per cent weighting to the US is down from 59 per cent in April last year.

Two areas the manager still dislikes are Japan and China.

Japan, he says, is being hurt by a strengthening yen, which is no longer flattering earnings. It also has "embraced 1980s-style diversification - I saw a business in Tokyo which made valves for the utility industry and also ran fitness classes. The manager didn't want to lose faith by selling off the fitness classes."

China, meanwhile, will have trouble turning around a system built on unsustainable debt-fuelled state-owned enterprises and investment. "48 per cent of China's income is derived from fixed-asset investments - building stuff," says Mr Thomson. "China has built its growth miracle on that, while in the UK fixed-asset income stands at around 15 per cent. China does it because it creates so many jobs. But if they try to take their foot off the gas pedal it obviously creates unemployment and we're very nervous about the Chinese transition to a consumption-led economy because of that creation of unemployment."