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Fund managers must continue to resign themselves to taking fewer risks as the market is set to remain unpredictable, a senior Legal & General figure has warned.

Rob Churchlow, who is in charge of the UK Growth trust, as well as its head of UK equities for L&G Investment Management, said the unit trust was being run on the basis of choosing "recession resilient" investments.

He claimed he was most avoiding retail business and focusing on utilities and "regulated industries" such as Severn Trent.

He said: "It is fair to say that we have got a fairly cautious view of of the macro-economic backdrop, particularly of the UK consumer.

"Real personal disposable incomes are going to be down next year with rising unemployment. We think consumption is going to be under pressure, so we have generally avoided companies at the retail end.

"There are a number of pressures on the banking sector end, in their capital ratio, bad debt is going to rise, it's a feature of the sector, so we have generally avoided banking as well."

But he went on to claim the trust's investments in Imperial and British American Tobacco was a sensible consumer retail area.

Mr Churchlow added he liked to focus on market leaders in sectors with high barriers to entry, or companies undergoing significant management changes, such as Cadburies.

He said: "We think things like tobacco are pretty recession resilient. Also, we like utilities such as Severn Trent and Pennon water, as well as regulated industries.

"We have focused on investing in companies where we hope the business models are resilient enough to withstand recession. And this year we have benefited from this cautious outlook, most of our stocks have done well.

The L&G UK Growth trust is equally weighted between 25 stocks from the FTSE 350 and Alternative Investments Market.

It requires a 3 per cent initial charge as well as an annual management charge of 5.5 per cent. It is one of the business' three long cap unit trusts, alongside the active opportunities trust and the equity trust.

Mr Churchlow described the management of the long caps division, which is split between six people, as "boutique".