Audrey Kaplan manages the Federated InterContinental Fund and serves as co-head of international equities at Federated Investors.  Audrey Kaplan:Recently, we have been asked a lot about the current state of the global economy.It's shifted from the strong recovery that we were seeing early this year to a more moderate recovery as we transition from government subsidies to private investment.  We're seeing a bit of a choppy period at this time.But sentiment is improving as we've achieved some milestones like the stress tests in Europe and the continued strength of the Chinese economy.We're slowing, but still growing.  Wallace Forbes: Well that sounds like a positive background.Any parts of that you want to elaborate on?  Kaplan:We get a lot of inquiries on the sovereign debt crisis in Europe.It is true that the austerity plans being implemented in some of those countries will impact long-term growth, but at the same time we feel that that will lead to more robust and strengthened economies in the long term.  Over the past year, the weaker Eurohas been good for certain economies, particularly the German economy, which relies on exports. Gross domestic product may be slowing in the peripheral countries, but Germany is still maintaining a relatively strong GDP trend and 2011 forecasts have actually been revised up in the last month.  Forbes:So that sounds like even though some of the steps they've taken may be slowing things down short term, for the longer term they're building a more solid, base to grow on.Is that correct?  Kaplan:Yes, that's accurate for the long term.But in the short-term how do you manage a portfolio? You have to seek out the highest quality assets -- both high quality sovereign countries and high quality companies.And so, that's what we're doing for our investors.  Forbes:For high quality sovereign countries, are there any particular countries that you favor at this time?
The emerging markets are showing sizable growth. These two markets have low sovereign risk and are flush with cash.