Magellan Financial Group increased the cash weighting of its Global fund from 2 per cent to 12 per cent four weeks ago due to concerns about the European debt crisis.

Hamish Douglass, chief executive and portfolio manager at Magellan, said the Global fund investment team sold down a number of holdings, particularly in the financial sector, to provide a buffer to what might happen in Europe.

"We sold things we thought would be slightly more sensitive to what's going on. The market was still strong when we did that," he said.

The Magellan Global fund has returned more than 15 per cent for the financial year to date, beating its benchmark by over 5 per cent.

American Express was one of those stocks that Douglass sold down. The fund manager's exposure to the stock fell by more than half to 3 per cent. Douglass maintains it is still a "great business" but the portfolio needed to be more defensively positioned.

Roughly 50 per cent of its portfolio is invested in multi-national consumer staple companies that derive between 25 and 50 per cent of their revenues from emerging markets, he said.

The fund manager's top 10 holdings include Yum Brands, which includes KFC, Pizza Hut and Taco Bell; eBay; McDonalds; Coca Cola and Proctor & Gamble.

"Most of these companies are trading at around 11 to 14 times earnings, it kind of peaks out at around 15 times earnings, but is still at a discount to the Australian market not withstanding the correction," he said.

Douglass said he is concerned about the medium-term outlook for the Chinese property market and banking sector but not local consumer spending.

"It's been growing at around 15 per cent per annum and will probably still grow by 15 per cent per annum," he said.