Global equities will outperform Australian equities in the medium to short term, with the Australian dollar likely to remain weak for some time, and a sea of “under-discovered” and cheap companies in emerging markets and sectors, according to star funds manager Kerr Neilson.

Neilson, founder and managing director of Platinum Asset Management, described the current economic environment as “first-class conditions” for professional stock pickers, warning investors not to get distracted by “noise” around the US Federal Reserve’s tapering of quantitative easing.

He said the world was experiencing a divergence of views away from the convergence of two years ago and that is throwing up buying opportunities.

“A couple of years ago the market was completely abhorrent of risk and uncertainty, and people were petrified and avoided uncertainty at all costs, but now we’re seeing a divergence in points of view regarding the future behaviour of stocks,” he said.

“It’s dangerous when there’s a convergence of views and there’s no dissention and all passengers are either on board or not.”

Neilson said the information technology sector was particularly exciting, and the “coming of age of the internet” would see some sectors flourish but “damage” others or make them “obsolete”. He said “defensive, predictable” stocks were highly vulnerable, citing as examples Johnson & Johnson and Pepsi Co, because they were expensive, growth was slowing and they’d been effectively “gorging” on fees by setting their prices higher every year.

“You can lift prices every year if inflation is rising and there’s wage growth, but that’s difficult to do in an environment of low inflation and low wage growth,” he said.

Neilson’s comments follow Platinum Asset Management’s full-year results on August 16. The company reported a 2-per-cent increase in net profit after tax of $129 million for the year to June 30, 2013, and a 2-per-cent increase in total revenue of $232 million.

The group’s flagship Platinum International Fund returned 47 per cent for the year to July 31, 2013, outperforming the MSCI All Country World Net Index by 5.7 per cent. Over the 10 years to July 31, the fund has delivered 8.1 per cent per annum, compared to the index, which returned 4.4 per cent.