Leading fund manager slashes US exposure in half

'Growing fiscal restraint in the EU combined with mixed economic signals in the US and China has created some uncertainty over the outlook for global growth. Southern Europe remains the most troubled global economic region,' he said.

Gibbs believes the chance of 'severe contraction' and 'significant public and private sector defaults remain' for southern Europe despite the bailout package finalised in May.

He added: 'Equity valuations remain low and a slowdown in global growth should keep any interest rate rises on hold for longer. This increases the relative attractiveness of businesses with good quality earnings yields.'

'However, slower growth will make earnings harder to defend. We therefore remain carefully invested.'

Gibbs said the fund would remain focused on 'quality companies with operations in relatively resilient economies.'

He talked up increased exposure to  the 'structural growth and healthy public and private sector balance sheets of the Far East' and was bullish on Turkey's strong economic recovery which saw the country post first quarter 2010 GDP growth of 11.7%

He remained very cautious about businesses operating in continental Europe however, with exposure falling by almost 2% to 6.8%.

After storming performance through the height of the credit crunch, Gibbs has lagged the average manager in the specialist sector over the past year,  returning 8.5% against the benchmark's 32.3% to the end of June.