Move to ease Euro crisis is ‘bailout botox’

Katherine Garrett-Cox, chief executive of Alliance Trust, which runs assets of around £2.9bn, also questioned US President Barack Obama’s $447bn (£284bn) job creation plan at a time when its deficit is so large.

“There is just more pain to come ... The politics are outweighing the economics,” she said, after Alliance Trust reported its interim results covering the six months to the end of July.

In response, Garrett-Cox said Alliance Trust reduced its exposure to equities – its core asset class – to 95 per cent of net assets at the end of July, from 99 per cent in June, as it became clear there were “very few places to hide”.

It is now focussing on more defensive names in the UK that are less exposed to Asia and the economic cycle.

Alliance has reduced holdings in Informa, miner Xstrata and HSBC, and bought higher-yielding firms with more reliable levels of demand such as publisher Pearson, National Grid and BG Group. UK equities were its largest asset class at the end of July – at 31.6 per cent – while North America stood at 24.5 per cent.

Its investments in Europe would remain focussed on countries in the north of the continent, it said.

The share of assets in fixed income rose to 5 per cent during the period.