For most investors, Pakistan is largely defined as being highly volatile, be it in terms of security, politics or the economy. And in many ways, it is. However, Charles Sunnucks, Assistant Fund Manager, Emerging Markets, argues there is increasing evidence of positive structural change in the country, which in turn has created some of the most compelling long-term bottom-up investment opportunities of any asset class.

Yields on10-year US Treasuries temporarily broke through 3% last week to the highest level since early 2014. We expect rising US wage and price pressures, a more assertive Fed and a higher fiscal deficit to help yields ultimately pass this threshold on a more persistent basis.

Volatility is back with a bang this year after a period of extraordinary calm. During the first quarter of 2018, the S&P 500 Index rose or fell by at least 1% in 23 trading sessions, compared to eight such sessions in all of 2017. The renewed turbulence, triggered by a confluence of growing concerns about rising rates, trade wars and regulation in the technology sector, will require a new mindset for investors.

Last week, equity performance resulted mixed after major indices tested a technical support and after US put/call volatility spiked up, testifying a short term surge in risk aversion. The MSCI World index's total return fell by 0.6% (S&P 500 -1.4%) but the EMU index overperformed at +1.1%.

People are drawing parallels with the Crimean annexation and sanctions put in place then - which heavily impacted the Russian market. But the macroeconomic Russian situation is very different today - it is much better...