Video: 'European shares are cheap - and Italy is cheapest of all' "Low valuations protect against political and economic shocks, which are 'priced in" to European shares. By contrast, the market has not appreciated how much growth has slowed in the emerging markets," said Mr Port, Nutmeg's chief investment officer. His is also bullish about British shares - "medium-sized companies are the sweet spot " - but less so about the United States, which is "starting to look expensive." He currently has no exposure to emerging market shares. He is also avoiding government bonds. We think they are somewhat toxic - yields at current low levels won't deliver much return, especially after inflation. We do have some corporate bonds, although they are very short-dated . This way you get a degree of protection against rises in government bond yields and interest rates. Alternatives Investors have a number of different ways to achieve the kind of risk spreading that Nutmeg offers. The simplest is probably a multi-asset fund. Here, the manager has, in effect, two jobs: first he decides on the right balance between shares, bonds and other assets, then he chooses the actual stocks and so on to own. Artemis Strategic Assets and the Ruffer investment trust are frequently tipped. Slightly more complex are multi-manager funds. This time the fund manager chooses the balance between different assets but subcontracts the choice of actual shares and bonds to others by buying and selling their funds. One disadvantage is that you have to pay two tiers of fee. Martin Bamford of Informed Choice, the financial adviser, recommended the Jupiter Merlin Income Portfolio, "a consistently performing fund investing across a range of different types of asset." Philippa Gee of Philippa Gee Wealth Management said Vanguard LifeStrategy 60pc Equity was "a decent low-cost alternative." The fund holds a number of Vanguard's own tracker funds, which cover a variety of shares and bonds. The difference here is that you will always have about 60pc of the fund in bonds; there is not the same discretion about the mix of assets. The underlying funds are also trackers. Fund supermarkets such as Hargreaves Lansdown and Bestinvest offer ready-made portfolios.