LONDON (Reuters) - Three down, one to go.
With the final quarter of 2013 now underway, global investors have watched all but one of the year's four dominant and lucrative themes play out with gusto. And their instinct appears to be to see out the year with all of them intact.
So far, 2013 has been defined by three big 'rotations' - from bonds to equities, from emerging markets to developed equities and more latterly a tilt from U.S. to European stocks.
The fourth theme - a significant strengthening of the U.S. dollar - has yet to crystallize and will most likely need the U.S. Federal Reserve to return to the theme of stimulus withdrawal once this week's U.S. government paralysis is resolved.
With the Fed still expected to start reducing its monthly bond purchases by year-end, strategists reckon all four jackpots may pay out.
So if markets appear relatively unfazed by a bumpy September calendar or political shenanigans in Washington or Rome, it's mostly due to a conviction these long-term strategies will endure into 2014.
The prospect of a still-broadening recovery of the world economy and a gradual "normalizing" of U.S. monetary policy still drive this thinking and tell many asset managers to hold their nerve.
"Discussions around the debt ceiling will add volatility (but) we think this should give us opportunities to reinforce our exposure to equity markets," said Nadege Dufosse, strategist at Dexia Asset Management.
Steven Steyaert, senior portfolio specialist at ING Investment Management, echoed that view. "We retain our bullish view on equities and stay overweight to European and Japanese equities."
Urging clients to "stay engaged" into the fourth quarter, Barclays Head of Research Larry Kantor said it's possible the year's positioning may become a little stretched and need some rebalance but the broad thrust would stay intact.
"While U.S. stocks still have some room for further appreciation, they have come a long way," he said. "This calls for a bit of rebalancing toward European and Asian stocks."
The long-term nature of this year's major drivers has helped many funds see beyond sometimes noisy political brinkmanship in the euro zone or the partisan U.S. budget rows or even 11th hour diplomacy surrounding international intervention in Syrian.
January kicked off with what some heralded as a multi-year 'Great Rotation' into under-owned equity from pumped-up, top-rated bonds at the peak of a 20-year bull run.
While there are still legitimate questions over just how much of that switching has actually taken place, the relative performance has delivered handsomely so far.
World equities .MIWD0000PUS have outperformed top-grade government bonds by almost 20 percentage points in the year to date. Comparing five percent year-to-date losses in U.S. 10-year Treasuries with almost 20 percent gains in euro zone blue chips .STOXX50E exaggerates the case further.
Within that rotation, the year's other big theme arrived by April - this time a switch from emerging markets .MSCIEF to developed markets as nerves about Chinese growth and Fed tapering undermined the currencies and bond markets of countries such as Brazil, India, Indonesia, Turkey and South Africa.
Yet again, the results of that shift would have landed you a spectacular 20 percentage point outperformance.
The last of the successful swaps would have been to move from Wall St to Europe at mid-year, with a very close eye on economic surprises that showed a troughing of Europe's battered economy and a maturing of the U.S. cycle.
Both euro stocks and the S&P500 .SPX have now delivered close to 20 percent in the year through September, but the former have outstripped the latter by a hefty 10 percentage points since July 1.
That leaves last of the big themes - that of a broad-based dollar rally fuelled by relative economic growth rates and interest rate shifts, cheaper domestic shale energy, narrowing trade deficits and even a U.S. manufacturing renaissance.
The dollar is still in the black for the year on a broad trade-weighted basis, but gains of about two percent have been a bit of a damp squib compared to the double digit gains in major equity markets and it lost more than 3 percent against the major traded currencies .DXY in the third quarter alone.
The Fed tapering delay has been part of the reason for the disappointing headline returns, as has the concentration of dollar gains against the weaker emerging currencies.
But few if any of the major proponents of dollar strength have yet thrown in the towel. A Fed move to row back QE by December is still on the cards, while growing euro exchange rate strength may well be met with further easing by the European Central Bank.
"We maintain our overweight in dollars," said Boris Willems, strategist at UBS Global Asset Management.
Even if the dollar doesn't deliver the big push in the end, three out of four big themes isn't bad.
(This story is corrected with first rotation in second paragraph to read bonds to equities)
Additional reporting by Natsuko Waki; Editing by Ruth Pitchford/Jeremy Gaunt