The investment clock model set out by Fidelity has moved from the "Recovery" stage of the cycle into "Overheat", according to leading Fidelity fund manager Trevor Greetham, who stresses that this is no ordinary "Overheat".

Greetham, manager of the Fidelity Multi Asset Strategic Fund, said: "We are embarking upon a period of strong global growth and rising headline inflation, a configuration we call the Overheat phase of the economic cycle.

"But this is no ordinary Overheat. Headline inflation rates in most countries are starting off negative, there is massive spare capacity in the world economy and the financial system remains fragile.

"Central banks have had a near-death experience and will be in no hurry to deliver the rate hikes needed to move to a restrictive monetary policy. However, they will come under increasing pressure to start their exit strategy from quantitative easing as we head towards year end and this is likely to be negative for bonds."

"My global growth scorecard lead indicator is at its strongest level since the V-shaped recovery of 2003/4. Central banks are operating ultra-loose policy, the OECD lead indicators have troughed, business confidence is rising and economists are upgrading their GDP forecasts."

He notes the "global inflation scorecard" has also turned positive for the first time since September 2008 on the back of rising energy prices and upgrades to Consumer Price Index (CPI) forecasts.

"With global growth picking up. I continue to overweight equities and property with a preference for the emerging markets and Asia. I have reduced my overweight in the consumer sector as discretionary stocks are interest rate sensitive and staples are at risk from rising raw material costs. I have instead added a little more to commodities. I remain overweight financials, technology and the consumer sectors," Greetham said.

"I have moved underweight government bonds keeping corporate bonds overweight and raising cash as the balancing item."