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Katherine Garrett-Cox, chief investment officer, reduced European equity exposure from 15.7 per cent to 11.1 per cent over the first quarter and slashed total equity exposure from 93.5 per cent to 85.9 per cent.

Approximately £130m of borrowings were paid off, and the trust is now sitting on £43m net cash.

In a statement, Ms Garrett-Cox said strong stockpicking in the North American and UK segments of the portfolio had helped the trust to generate a return of 4.4 per cent for the period.

She added: "The financial effects of the US sub-prime crisis peaked in March with the near-collapse of Bear Stearns. Its subsequent rescue and massive financial support for the market by the Fed calmed fears of systemic collapse and created the platform for a strong recovery in equities."

The fund's Asia Pacific ex-Japan investments underperformed over the three months, Ms Garrett-Cox said.

On the alternatives side, private equity exposure was increased from 5.4 per cent to 6.1 per cent, while property holdings were left untouched.

The trust's first quarter results marked an improvement on its figures for the year ending 31 December, which saw it lose 4.6 per cent in NAV terms. At the time, chief executive Alan Harden said turning around the fund's performance was an immediate priority.