With some of 2005’s favourite market themes, including precious metals, oil and Japanese equities, coming back in March, the short-term outlook looks positive for equity investors.Several 2005 market themes took centre stage in March: precious metals prices soared, with an ounce of gold hitting a 25-year high, closing the month up 3%, in dollar terms. The increase was more dramatic in the last week of the month, when prices jumped 6% in six days. Then there was the energy-spurred-inflation culprit: oil. After a drop below $60 a barrel late in February, Brent futures added more than $6 (12.6%) by March month-end. The third 2005 flashback was the return of Japan. Similar to the case of gold, the last week of March was kind to Japanese funds. After digesting 2005 year-end gains, the Nikkei 225 hit highs not seen since the dot.com-fuelled results of the 1990s. European equity indices continued to rank among the top performers, with Germany’s Dax 30 up 10.4%, France’s CAC 40 up 10.7% and Spain’s Ibex 35 up 10.4%. The FTSE 100 index broke the 6000 barrier in March for the first time since 2001. European and Japanese Smaller Companies sectors topped the IMA tables, posting 6.23% and 5.25% respectively, with UK All Companies gaining 3.11% (ranked 8th). Global Growth funds gained an average of 2.72%, placing the sector 11th. Global Growth allocations increased Japanese and Asia exposures by on average 0.3% and 0.4%, possibly reflecting increased optimism in the region. UK equity exposures fell on average by 0.4%, while Continental European exposures fell by 0.1%. M&G International Growth performed best among the peer group, posting 5.77% for the month. The fund’s overweight position in Europe aided the performance in March owing to the outperformance in the region – the fund holds 38.8% against the sector weighting of 22.23%. Insight Global Dynamic Managed had the most significant movements in geographical allocations in March. The fund moved from an overweight position in North America to an underweight position of 22.2%. Its UK and Japanese positions increased by 9.2% and 9.5% respectively. Now that the broad indices have recovered from the drubbing that occurred after the dot.com bust, many markets are testing new highs. With American investors eagerly awaiting the end of interest rate rises and oil price appreciation continuing, the short-term outlook for equity investors is positive. The average cash exposure for the sector at the end of March was 2.56%, rising slightly from February’s 2.4%.