As rare as double-dip recessions may be (with only one occurrence since World War II), Mr. Young feels that investors should not be complacent about the risk of a recurrence.

"Western governments have pumped a lot of money into their economies, and the effects of that seem to be wearing off," he observes.

Economies may not necessarily slow to the levels seen during the recent financial crisis, though.

"I doubt it will come to that, but economies will certainly start slowing down again as recovery tapers off and possibly one or two will go into a recession," says Mr. Young.

The West is vulnerable, due to its huge unemployment issues and deflated consumer power. This ultimately will have a knock-on effect on Asian economies.

His views on the West apply every bit as much to Europe, which he believes got off lightly during the recent stress tests for its banks.

He surmises: "Germany may appear to be growing at a fast pace, but it has a questionable banking system. France seems to have sort of survived and the U.K. is a mess."

Mr. Young believes that nagging fears of a sovereign debt default and worries over the strength of the region's economic revival are expected to weigh on market sentiment for some time. Although the Euro-zone economies appear to be on the mend, the uneven pace of growth across the bloc means that the recovery remains precarious.

He also cautions that there is a real risk of a currency devaluation or default occurring in the region. He says: "Despite the more upbeat conditions, downside risks remain. They can print more money but their economic outlook remains fragile. However, this need not apply to companies based there, as corporate results have surpassed expectations on the back of rigorous cost cuts and improving efficiency. Against this backdrop, we are cautious about macroeconomic prospects, but are more optimistic about the quality of the holdings in our investment portfolios. We believe these companies are likely to fare better in uncertain times than their weaker rivals."

Still, he is cautious, as Aberdeen's earnings growth projections for companies are being pared, despite the more upbeat expectations from analysts.

"Our expectations for global earnings growth are more modest than the 15 to 20 percent projected by analysts," says Mr. Young.

Mr. Young says that Aberdeen is most positive about Asia and Emerging Markets.

He said: "If you look at our global funds, we have approximately 35 percent in European equities, including the U.K. (via holdings in companies like Unilever, Nestle and Shell), and about the same allocation in Asia and the Emerging Markets. We also have an approximate 20 per cent allocation to the United States. If you compare these allocations to the benchmark, it shows us to be hugely over weight in Asia and the Emerging Markets and hugely underweight the United States."

In terms of single countries in Asia, Aberdeen's biggest over weights are in countries like Singapore and Hong Kong.

Said Mr. Young: "We like Singapore and Hong Kong but it has nothing to do with their economic prospects. These markets offer attractive investment opportunities as they have longstanding companies with strong regional and global businesses."

Aberdeen Asia is also invested in markets like Thailand and Indonesia, which have done spectacularly well.

"It's pretty hard to work out why Thailand has done well," muses Mr. Young.

"If you were to focus on the country's political situation, you would have shorted Thailand and missed the boat."

On the other hand, he sees Indonesia as a story that comes round once every 10 years.

Mr. Young also expressed surprise at the transformation that has taken place in Brazil with the opening of the Novo Mercado, with a slew of professionally run companies, which he muses were always there but not publicly listed. Under the Novo Mercado (or New Market) companies commit themselves voluntarily to adopt corporate governance practices in addition to those that are required by law.

"And they are impressive,” says Mr. Young of the Brazilian companies. "Generally, governance in Latin America has improved for the better."

Brazil, together with India, is Aberdeen Asia's big bet within the Global Emerging Market space because many good companies with growth potential can be found in these markets.

Said Mr. Young: "We will only invest in a company if we feel that the management is trustworthy and transparent. However cheap a company may look, our starting point is always quality and corporate governance. This principle has saved us from a lot of disasters."

It is because of this principle that Aberdeen Asia has kept its exposure to China equities to a minimal.

"Corporate governance is generally poor among Chinese companies," Mr. Young explains.

"All the big companies are government controlled, and you never quite know what the government is going to do next, which does not give us a lot of comfort," he adds.

"Take the large banks in China which are state controlled for example - it's not clear if they are making good loans or if they are doing it because of moral suasion by the government," said Mr. Young.

"So there has been a quality issue with many China stocks, which makes them unattractive from our point of view."

Despite the volatility and turmoil in the markets which has caused the investment landscape to shift remarkably, Aberdeen Asia has not made any huge bets or raised its cash levels dramatically.

"We have been holding on to the same old stocks that we have held for many years," says Mr. Young.

"Our cash levels are permanently low; in fact I cannot remember the last time it was over five percent," says the man who set up the group's Asia-Pacific headquarters 18 years ago.

*Source: Aberdeen Asset Management Asia Limited, as at end June 2010.