Alliance Trust, the UK�??s largest listed investment trust, said it had sold off £140m from its UK equity investment portfolio during the past six months, shifting £166m in cash in its pan-Asian fund and £124m to a general emerging market fund.

This saw Alliance Trust�??s holdings of UK equities fall from 36 per cent to 31 per cent, with its holdings of emerging market shares moving up to represent almost 6 per cent of net assets, from less than 1 per cent six months ago.

Developed markets, such as the UK and Europe, were hamstrung by their debt burdens, said Katherine Garrett-Cox, chief executive. Better potential for growth exists in developing economies.

�??The debt indigestion limiting the growth of the US and western Europe is a concern,�?� said Ms Garrett-Cox.