World stock markets are not immune from the coronavirus. We have lived through a nasty correction in equity markets, followed by recovery outside China.

The epidemic is likely to direct investors away from China where the economy will be damaged, but is unlikely to have more than a short-term worldwide impact unless it takes off in other large economies and interrupts production.

The FT fund has no direct exposure to China, where I sold the holding last year as trade tensions increased and Chinese growth started to slow. The partial trade deal between China and the US has created a more positive backdrop for shares since the start of the year, reinforced by general monetary easing. Technology stocks and US markets have once again led the rise. 

The FT balanced ETF fund has risen a bit more as a result, adding around 2 per cent to the 15.7 per cent return in 2019. My decision late last year to convert foreign currency into sterling (which looked very cheap at $1.21) worked well and the associated boost to UK shares was also a positive for the fund. The global portfolio is currently about two-thirds in sterling assets or hedged into sterling.

While the spread of the virus is clearly of concern, I remain sanguine about prospects for the year ahead in investing. World central banks are keeping markets well supplied with money, and there are low interest rates throughout the advanced world. Governments want growth to speed up, while inflation stays low.

However, readers will know that I worry about central bank policy and about the prudent but sufficient supply of credit to economies to allow sustainable growth and rising asset prices.

The other main drivers of contemporary share markets are the twin revolutions, directed by green policy and digital transformation.

The world is witnessing a new battle between the US-led system based on the mighty US digital businesses, and the EU-led system centred on the need for green transmutation led by government.

At Davos, the world watched a cameo drama of the new divide between Europe and the US, with the very different presentations of Donald Trump, the US president, and Greta Thunberg about the need for a green revolution.

Europeans warned of disaster if the world did not change more quickly, while Mr Trump told us the world would prosper with expansion based on cheaper oil and gas and US technology.

The new EU Commission is calling on the governments, companies and peoples of the EU to boost growth through a massive investment in new forms of heating our homes, new ways of getting around from more public transport to more bicycles and electric cars and a big change in how power is generated and energy harnessed by us all.

The aim is a €1tn investment over the next few years. EU taxpayer money will be released to pay for some of the costs of transition. This will offer financial support to places where closed coal mines and abandoned fossil fuel power stations, empty diesel car factories and redundant capacity to make gas boilers and oil-based heating systems cause temporary disruption and loss.

So far, this is mainly a top down revolution. The EU needs to persuade many more people to buy new green products, ranging from electric cars to smart home heating systems. They need to turn the consumer away from long haul travel for holidays, from travelling to work by car, and from buying all those goods in the shops that travel long distances and come wrapped in plastic.

Meanwhile in the US, Mr Trump boasts about major growth in oil and gas output, in coal mines and fossil fuel generated electricity. He tightens the controls on Chinese theft of intellectual property and bans the use of some Chinese products and services in sensitive digital systems.

Consumer spending powers the US economy. Around the world, people queue to buy new iPads and smartphones, to download the latest shows on Netflix and other entertainment and news services, to search on Google, to shop with Amazon, and to keep in touch with friends through Facebook. The US tech revolution is more of a bottom up change driven by consumer demand, though of course the US authorities use, direct and support it.

Some of the success of the US technology giants came from a free to the user service. You can tweet, use Facebook, search via Google and download a lot information for free, which speeded up adoption, while online shopping offered keen prices as well as convenience. The revenue comes from online advertising and added value services.

Electric cars and replacement greener heating systems are seen as expensive by many possible buyers, who await a government subsidy or a reduction in manufacturer’s price before they will be tempted. Many consumers are also holding out for better electric cars with more range and easier recharging.

Electricity companies have been told to introduce smart meters and offer them free, yet they have encountered substantial opposition from many customers. It appears that people do not need or value the facilities the smart meter offers. Many are suspicious of the motives of the companies, fearing the smart meters will be used against them to flex tariffs on a timed basis or some other negative.

So the US revolution sweeps on with the digital tills ringing. It is seen as disruptive and in some ways dangerous by the EU, who are busy looking at more ways to regulate and tax it. The green revolution pushes on with enormous government pressure behind it. Many of the public accept the need for environmental change but remain reluctant to amend their lifestyle and commit the large sums needed to replace their transport and the powering and heating of their homes. It means in share market terms the US revolution wins out, with the main gains continuing to occur in the global and US tech sectors.

The final irony is that in the green revolution, the stock market stars are often US or non EU companies. The FT fund owns a holding in the global clean energy index, which is 78 per cent weighted to the US, China, Brazil Canada and New Zealand and only 19 per cent to EU countries.

Sir John Redwood is chief global strategist for Charles Stanley. The FT Fund is a dummy portfolio intended to demonstrate how investors can use a wide range of ETFs to gain exposure to global stock markets while keeping down the costs of investing.