Noting the S&P 500 index has not posted a daily move of more than 1% in either direction since 16 April, Hamish Baillie and Steve Russell (pictured) said history shows “calm does often precede a storm.”

They said: “Investors are lulled into a false sense of security and by extension excessive risk taking. The result today can be seen in narrowing credit spreads and a buoyant corporate bond market, the grubbier end of which is nearing pre-crisis highs.

“It is tempting to think that the world is returning to normal, but we should not forget the amount of debt which almost toppled the Western world’s financial system has not been reduced either on an absolute or relative basis and the support being provided by central banks remains sky-high.”

The duo also defended their “stubborn” decision to retain a 24% exposure to the US dollar. Acknowledging the currency’s weakness against sterling, the managers argued the UK’s “looming political uncertainties” and current account deficit will not “stay out of the limelight” forever.

Japanese equities and gold returned 0.8% and 0.4% for the fund over the month, the managers reported, but equity performance elsewhere was flat and protection assets acted as a drag on performance.

In total, the trust’s NAV fell by 0.4% during the month compared with a fall of 1.3% in the FTSE All-Share Total Return index.