According to Philip Dicken, Head of European Equities and Francis Ellison Client Portfolio Manager, European Equities at Columbia Threadneedle Investments, if Emmanuel Macron were elected, the environment would suit active investors and reinforce their potential to find attractive opportunities among high-quality stocks.

We see a reduced near-term risk of trade wars, as President Donald Trump's White House appears to have softened its stance toward both the North American Free Trade Agreement (NAFTA) and China. This could benefit emerging markets (EMs).

While a moderate candidate is the most likely victor in our assessment, the situation remains fluid with little risk priced in. In such an environment, we believe it is important to protect investors in our multi asset portfolios from market shocks. We have tactically reduced exposure to financial markets and increased exposure to the Japanese yen for its defensive qualities in times of stress.

Most reflation trades aren't crowded or expensive, our research suggests. U.S. stock prices more fully reflect the maturing reflationary cycle, and we see better opportunities in Europe, Japan and EM stocks. We also prefer U.S. credit over government bonds.

Hedge funds generated alpha last week. Global Macro funds outperformed thanks to higher dollar and oil prices. Amid slightly negative global equities, L/S Equity funds succeeded in extracting excess returns, especially in Europe through relative trades.