“Moreover, uncertainty about the strength of economic growth in emerging markets, especially China, is not supportive for the backdrop for global growth. With valuations now standing at a level anticipating upgrades to forecasts of corporate earnings, we believe that the performance of the market of the past year is unlikely to be repeated over the next twelve months.”

The shares Barnett is backing

Despite issuing a pessimistic outlook Mr Barnett said there are still ways of making money.

Mr Barnett, who took over the Invesco Perpetual High Income and Invesco Perpetual Income fund at the start of March, said he is a fan of the tobacco sector, which was also one of Neil Woodford’s favourite sectors.

Rival fund managers have sold out of the sector, ditching the likes of British American Tobacco and Imperial Tobacco, due to increased regulatory pressures, which has led some countries to introduce plain packaging rules.

But Mr Barnett dismissed these fears and said he is sticking by the shares.

“Data from Australia showed that there had been minimal effect on consumption from the first year of plain packaging. There had been a rise in the level of illicit cigarettes sold,” he said.

Since taking over the funds Mr Barnett has not made many changes, retaining the majority of the shares he inherited. Both funds still have pharmaceutical firms GlaxoSmithKline and AstraZeneca as the top two holdings.

However, Mr Barnett highlighted three shares he is currently favouring are Provident Financial, the financial services firm, and Circassia, a pharmaceutical firm and Xeros, which markets washing machines. Both Circassia and Xeros both floated on the UK stock market last month.

It was first announced last October that Mark Barnett would replace star fund manager Neil Woodford, who will launch a UK equity fund for his new company next month – Woodford Investment Management.

Mr Woodford is Britain’s best known fund manager. He managed the Invesco Perpetual Income fund for 25 years, turning a £10,000 investment into £230,000.

Much of his success came from taking bold decisions about the type of company he wanted to invest in or avoid. In the late Nineties Mr Wooford refused to follow the herd that was buying tech shares, but a year later when the bubble popped and shares in the sector tanked his decison saved investors in his funds from losing a huge amount of money.

As well as setting up a fund at his new firm Mr Woodford will continue to manage three funds for St James’s Place, who have switched the management from Invesco Perpetual to Woodford Investment Management. The three funds are called UK High Income, Income Distribution and UK Equity.

• Get Twitter alerts for all our investing stories: follow @telegraphinvest

Investment tips every week by email – sign up here