Return seekers should focus their efforts on financial stocks, while utilities could come under increased pressure, according to the team behind JPM AM's blockbuster Global Macro Opportunities fund.
'We like the large financials in the US, we think they are nicely leveraged to US growth prospects because they have good domestic franchises.
'We also have some US policy outcomes that would be beneficial, as lower rates of corporate tax and deregulation should also benefit US financials, particularly the larger caps,' Shah said.
North America makes up 22.6% of the regional risk in the fund, with the managers having paired long positions in US financials with a short allocations to US utilities.
'There are going to be some self-reinforcing factors that will come into play that will keep global growth elevated. One of the outcomes of that we feel is going to be a drift higher in yield, in particular US yields.
'That should be to the detriment of sectors that are high dividend payers and that have negative correlation to US yields, such as utilities,' Shah said.
Away from the US, the trio remain positive on China and prefer large-cap companies including financials. The theme of ‘China in transition’, which is one of seven others in the fund, currently makes up 28.3%.
‘We feel over a two-to-three year view the Chinese economy is likely to do quite well against expectations. In a situation where you have better economic growth and better free cash flow in the economy - that is quite good for the Chinese banks.
'We feel that they are particularly cheap and so are susceptible to a positive re-rating which should be beneficial for our strategy,' he said.
Shah added that one of the best performing themes in the fund was EM convergence, which makes up 17.8% of the fund. He warned that investors should pick their themes in emerging markets carefully.
'As we start to embark on a faster pace or a policy of normalisation in developed markets, we have to be more careful with the sets of emerging market strategies that we choose.
'We want to be leveraged to global growth and not be vulnerable to strategies which would perform badly if global yields move higher.'
The JPM Global Macro Opportunities fund returned 23.5% over three years to the end of August 2017 in the multi-strategy category. This compares with a sector average of 3.5% over the same time frame.