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The credit crunch is not over but the US economy is bottoming-out, according to the manager of JPMorgan's £348.2m American Investment Trust.

At the investment company’s AGM last month, Garrett Fish said the US economy had experienced similar cycles in equities before. He said every time the US economy entered a low-growth phase, inflation also fell due to decreased demand.

While the immediate outlook for inflation was still uncertain, Mr Fish said the current growth focus of the Federal Reserve should be considered a sign that policymakers were looking to the future.

Last year the fund was underweight financials, although there was a small holding in the sector, but now the manager is feeling more bullish.

Mr Fish said: "We managed to avoid most of the turbulence from brokers, mortgages and sub-prime related companies, which obviously benefited performance.

"We moved to a small overweight position in financials at the beginning of 2008 as there are company-specific opportunities in the sector.

"I also favour technology and have strong convictions in some large-cap stocks in this area, for example IBM and Microsoft."

Mr Fish told shareholders at the AGM that the portfolio was underweight commodities and utilities, as although there were still growth opportunities in these sectors, they were no longer good value when compared to technology, healthcare or producer durables.

The fund has a discount of 9.7 per cent, up from its 12-month low of 13.3 per cent in January.

The first three months of 2008 was the US equity market’s worst quarter since 2002. During that time the fund underperformed its benchmark, as strong returns from the portfolio’s information technology and financial holdings were outweighed by lacklustre returns from its healthcare and energy stocks.

Information technology is the portfolio’s largest sector weighting, at 18.8 per cent. Financial services is second at 14.9 per cent, followed by healthcare at 13.3 per cent and resources at 10.3 per cent.

Over three years until 26 May 2008, the fund has returned 22.6 per cent, outperforming its benchmark S&P 500 Composite index, which returned 14.6 per cent, according to Morningstar.

However, Mr Fish's optimistic tone was not universally agreed upon. Ian Kernohan, chief economist at Royal London Asset Management, said: "The US equity market has certainly discounted a lot of downside, but the view that we have passed the worst is premature.

"The slowdown has quite a way to go. When it hits earnings outside of the financial sphere, there will be a problem for equities. The recent rally has been due to less bad news, but I don’t see that being sustained even in the third quarter."