Investors should not fear sovereign defaults but should be more concerned about artificial measures to keep faltering economies afloat, according to Axa Asia Pacific chief investment officer Mark Dutton.

"What the market is really concerned about is what happens if Greece, or somebody like Greece, actually defaults. That is a scary word for an investment manager to mention, but I think default is highly likely and it is not a problem," Dutton said.

Dutton said that historically most financial crises have included defaults on sovereign debts, but these defaults should be taken as relatively standard procedures to renegotiate repayment deadlines.

"It is routine for it to happen around about once a decade," he said.

"Default actually means - what companies do fairly regularly - going to their borrowers and saying: 'We are going to have trouble with this repayment schedule. Let's sit down and reschedule.'"

"The problem is padding the world economies with an unsustainable support tactic, which ultimately means that governments are running everything," Dutton said.

He made the comments after Ireland agreed to a rescue package with the European Union for a maximum of 100 billion euros, after the global financial crisis caused a collapse of Ireland's banks.

Dutton said that in the current fear-driven investment climate, macro-economical events like Ireland's rescue package explained all of the movements in global markets, including the Australian stockmarket.

"Risk aversion is almost a complete explanation of the cycle of the sharemarket. It has nothing to do with the value of stocks or bonds, it is how tolerant the market has become to risk," Dutton said.

Despite the gloomy investor sentiment, the outlook for equity market returns is actually quite favourable, as corporate earnings are likely to come in higher than is generally expected, while the valuations of global investment markets are especially attractive, Dutton said.