The US and UK monetary authorities are both facing "difficult decisions in the coming months", the £600m Murray International investment trust warned yesterday.

Its chairman John Trott said: "At this point in the business cycle, history suggests that risks associated with inappropriate policy actions are rising. The high volatility in markets indicates that many investors are now recognising this. Tighten too much and risk tipping the economy into recession; loosen policy too quickly and risk losing the respect of the bond market."

He added that the trust run by Aberdeen Asset Management again found returns hampered by the strength of sterling in the first half of the year to June 30, but said that compared with the UK and US "thankfully elsewhere in the world the prospects are much brighter".

Investors exposed to the emerging economies of Asia stood to gain from the "new investment possibilities in growth sectors such as finance, construction, transportation and telecommunications", which meant the 100-year-old trust was "well positioned to benefit once the markets have settled down".

Two of the trust's top three holdings, however, are Atrium Underwriting and insurer Resolution, while Weir Group and Vodafone appear in the top 10. The top 20 features three Brazilian companies, two from Mexico and one each from India, Thailand and China.

The trust lagged the 7.7% rise of its benchmark with a 6.6% total return, but that followed last year's 50% outperformance (4.6 percentage points) of the benchmark when the fund returned 13.8%.

After warning in March that markets might then be heading for a fall, Trott said yesterday: "Global equity markets were surprisingly strong over the past six months as investors ignored worrying economic trends, concentrating instead on surging merger and acquisition activity."

He went on: "The pessimism that prevailed in global fixed income markets, based on fears over inflation and deteriorating asset quality in the US housing market, was not replicated in equity markets. Despite adverse headwinds from rising interest rates and faltering corporate profitability, many markets produced above-average returns."

The best returns came from Brazil (31.3% in sterling terms), Asia (15.4%) and continental Europe (11.4%). Continued weakness in the dollar and the yen constrained sterling returns from the US and Japan, while the UK return of 8.3% was a "satisfactory performance".

Losses in Japan and in fixed income outweighed the positive impact of switching money out of the US and into the smaller Asian markets. "Given the widespread global diversification of the total portfolio, the relentless rise of sterling against most foreign currencies continued to constrain returns from overseas markets," Trott added.

The second interim dividend rises by 13.2% to 4.3p, while the final dividend is expected to be no less than last year's 7.6p.