He said that if risk appetite remained at its current level, investors would be attracted to riskier assets such as local currencies and emerging market debt.

Overall, investor focus seems to be divided between equity and fixed income funds, with some fund managers backing both.

In equity, the consensus is on emerging markets, particularly in Asia, with China, India and South Korea attracting the most attention from investors.

Portfolio managers at private banks said there were significantly more opportunities now than there were last year. While they agreed that investment-grade corporate bonds offered good value, they were divided on whether to pump more cash into equities or not.

'Our house view is that we are moving from a trough to recovery,' said Lionel Kwok, head of investment solutions at Credit Suisse Private Banking in North Asia.

'It is doubtful that it is going to be a sharp recovery, but rather a gradual and slow one. But by moving from a contraction to a recovery, that provides a lot of investment opportunities to the client,' Mr Kwok said.

Eric Sandlund, head of investment solutions in Asia at UBS Wealth Management, said: 'For Asia equities, excluding Japan, we remain overweight.'

He said this was a reflection of how the banking systems were not as affected by the credit crisis, and how secular growth was more sustainable.

'The level of deleveraging we expected in much of the developed world should not be experienced to the same extent in Asia ex-Japan,' Mr Sandlund said.

In fixed-income, attention is almost exclusively focused on investment-grade corporate bonds, predominantly in Asia.

'With the slow recovery of the economic cycle, we believe credit is going to be tightened, and this will benefit high-quality corporate bonds. There will also be increasing defaults in the high-yield bond market, but this should not filter in to the high-grade corporate bond market,' said Mr Kwok.

Poh Huay Imm, head of mutual funds for Deutsche Bank Private Wealth Management, was less bullish about Asian fixed income markets, and preferred developed markets, where there were more investment opportunities.

'I think the United States and Europe are both more interesting in terms of investment-grade funds. Asian investment-grade funds are selectively interesting as well, but in terms of the fund bond space there aren't many funds out there that are of reasonable size offering good investment opportunities,' said Ms Poh.

Despite the signs of a recovery, industry players are quick to caution that there is still potential for volatility, and investors should ensure that they diversify their portfolios across asset classes and geographies.

Dividing a portfolio between equities and bonds is one way of doing this, as the downside correlations start to disappear, but alternative funds are also being touted.

Private bank Julius Baer, for example, is positive about gold funds.

'We believe every client should have up to 10 per cent of their portfolio in gold,' said Kenneth Ho, head of products Asia-Pacific for Julius Baer.

'Obviously gold is going to be more attractive as a safe haven, but even if the markets go potentially higher, we believe that there are fundamental reasons why gold will still hit US$1,300 [an ounce per year],' said Mr Ho.

Advisers also suggest that investors look at hedge funds.

'Today you have 7,000 or 8,000 hedge funds in the world. We have probably lost 2,000 or 3,000 in recent months. I tend to say the bad ones are mostly eliminated, and the good ones remain,' said Vincent Trouillard-Perrot, chief executive of BNP Paribas Investment Partners Asia (ex-Japan).

Mr Trouillard-Perrot said the key was to look for market-neutral multistrategy hedge funds. However, he said that investors should make sure that they determined the level of liquidity required, and invested accordingly while bearing in mind how much risk they wanted to take on board.

Ms Ching of Fidelity International, however, said she was wary about hedge funds or any vehicle that relied on investing with borrowed money, particularly since liquidity levels were still low and debt was expensive in the wake of the financial crisis.

Overall, market sentiment is that this is an ideal time for investors to rebalance their portfolios.

'The reality in the broader retail space tends to be risk averse, said Mr Sandlund. '[Retail investors] are either holding on to too many money-market funds or are underweight on equities.

'We think that people should do a risk assessment and adjust their portfolios, not to reflect the panic that might have been in the air for the past 12 months, but rather to reflect what their longer-term investment needs will be,' he said.