The S&P 500 closed at a record high 2137 points on Monday, breaking a seemingly impassible resistance level fuelled by impressive June payroll data on Friday which boosted confidence in the economy, and relentlessly rising bond prices.

Chad Padowitz, chief investment officer at Wingate Asset Management, which runs a global equity fund, said while in aggregate US equities were among the most expensive in the world, at a sector level, the fortunes are split between sectors, with the dispersion in valuations wider than in 2000 during the dotcom boom.

Investors are snapping up defensive, or bond proxy stocks within the utilities, telecommunications and consumer staples sectors, and selling down other sectors to finance that trade, creating some big opportunities for buyers, he said.

"The expected return at the index level is potentially zero for the next five to seven years," Mr Padowitz said.

"At the market level there are no opportunities, however within that we see sectors on the other side of the bond trade that are relatively cheap."

Volatile with 'shifts'

Garry Laurence, global equities portfolio manager at Perpetual has also spotted emerging value in the US market, but the market may have reached its peak, remaining flat from here.

"My basic view is that the market will remain volatile as it has been over the past year or two, but there could be shifts in the sectors," he said.

Mr Laurence said the best opportunities were in healthcare, and technology. In technology Perpetual's picks are Oracle, EMC and Zhaopin, and in healthcare, Merck and Sanofi.

Mr Padowitz said none of his investments were linked to the bond trade, adding negative interest rates was a "mania", rather than a lasting phenomenon.

"Anytime people buy shares because bond rates go lower is not a share we want to buy," he said.

Mr Padowitz is buying in the financials and healthcare sectors, picking Citi Group and Bank of America in financials and Allergan and Sanofi in healthcare.

But there is no limit to the bond trade while central bank policy remains indefinitely easy, Stephen Halmarick, head of economic and market research at Colonial First State Global Asset Management said. He expects the Bank of England to cut rates this week, the Bank of Japan to ease before the end of the month and both the Reserve Bank of Australia and Reserve Bank of New Zealand to cut next month. 

Japan on radar

"Global monetary policy is getting easier, that's because the downside risk to the economy and global inflation have been tempered by it," he said.

Japan, too has emerged on the radar of globally focused investors, following the landslide victory of Prime Minister Shinzo Abe at the weekend.

"If you look at valuations in Japan, they are a lot more attractive than say the US," Mr Laurence said. "If you do get stimulus out of Japan, you can see why Japanese markets have been rallying the past few days."

Mr Padowitz said while Wingate had not previously invested in Japan, the equity market had become "so unloved as to actually be attractive".

"It's more interesting now and it does warrant a closer look," he said.