He warned investors that the outlook was unlikely to improve unless alternative government approaches to financial woes could be put to “real, productive and expansionary use”.
Mr Gray added that it was important to make sure that investors were more careful than ever about stock and fund selection.
His portfolios, which are both in the Investment Management Association Flexible Investment sector, is ranked among the bottom 10 for their three-year performance, according to to the latest figures from Morningstar.
However since 2008 the special situations portfolio has outstripped its peer group, returning 28.5 per cent, compared with the peer group average of 22 per cent.
Gareth Lewis, chief investment officer for London-based Bestinvest, said: “While seemingly limitless monetary expansion has yet to ignite real economic growth, it has also failed to create the inflationary pressures many had feared.
“In part this can be attributed to the fiscal austerity imposed by many Western governments but in reality it is a natural consequence of the solvency issues plaguing the banking system.
“As a result we believe policymakers should remain focused on dealing with the root cause of the current malaise and ensure the adequate recapitalisation of the banking system. Here progress has at best been patchy.”