• Log in
• Register free
• Subscribe
• Help
• Tour & Trial IC Advantage

Top US fund picks

Created:

2 July 2009

Updated:

29 June 2009

Written by:

Maike Currie

Whether passive or active - and you could blend both strategies - most analysts agree that presently the trick to investing in the US, is to invest with a long term time horizon, as this will enable you to take advantage of value opportunities presenting themselves. Aris Vatis, manager of the Fidelity American Fund comments: "The US equity market has a greater breadth and depth of opportunity than anywhere else around the globe, and market volatility has given an unprecedented opportunity to buy into high quality companies at valuation levels that have not been seen for half a century."

Active fund recommendations

For investors looking to benefit from low company valuations, Mr Brierley's core recommendation is the JPMorgan American investment trust. "The managers have constructed an impressive long-term record of consistent outperformance of the S&P 500 benchmark over five years." For investors looking for a lower risk approach, Mr Brierley recommends the Edinburgh US Tracker trust from Aberdeen.

Mr Potter believes investors should be looking for managers who have a very flexible approach to stock picking and asset allocation within the American market, and here he signals out Mr Wintle's Neptune US Opportunities Fund, JO Hambro's US Opportunities Fund managed by Gordon Elvy and the Martin Currie North American Fund run by Tom Walker and David Forsyth.

"Given Martin Currie's large cap focus and the flexibility of the other two funds, the combination of these three funds should serve investors well during these uncertain times," he says.

Sheridan Adnams, investment adviser at The Share Centre, likes the Jupiter North American Income fund, managed by Sebastian Radcliffe, who is supported by Rupert Corfield. "The majority of the portfolio investments are held for five years with the managers only changing the emphasis of the portfolio weightings based on their view of prevailing economic conditions." The fund has outperformed its sector by 15.1 per cent over the last five years with a cumulative performance of 17.2 per cent, compared to 2.1 per cent.

Mr Adnams also picks out the Gartmore US Growth Fund, managed by US-based Tom Marsico, as a medium risk investment. "The fund is suitable for those investors that wish to have access to large cap companies within the US, but that also exhibit a strong global presence. The fund boasts a cumulative performance of 23.7 per cent," he says.

For a bit of spice further down the market cap spectrum, Glyn Williams, investment analyst at independent financial adviser (IFA) Mac Financial, picks out Jenny Jones's Schroder US Small & Mid Cap Fund, and Threadneedle's American Smaller Companies Fund.

Passive fund recommendations

Ms Patel says: "The main way to get ETF exposure for the US market is through iShares whether it's through the MSCI North America ETF or the S&P 500 ETF," she says. "Vanguard has also recently launched a low cost tracker which they claim to be as competitive if not cheaper than some of the ETFs."

If you do opt for a passive investment approach to the States, deciding what index you wish to track can make a huge difference. Mr Williams points out that in the US the Dow Jones Index is down around 5.5 per cent since the start of the year, the S&P 500 index is almost unchanged, while the Nasdaq 100 index is up close to 20 per cent.

The blended approach

"The real opportunity in the US is blending active and passive funds by picking and choosing just what it is you want to be exposed to or not," says Mr Williams. "One approach might be to hold equal weights in JPMorgan American and JPMorgan US Discovery investment trusts for the long term, while buying a short ETF such as the db x-trackers S&P 500, to enable you to rise out of the storm pretty comfortably up until the market starts to rally."

• Share Tips
• Trading
• Companies
• Markets and Sectors
• Columnists
• Stock Screens
• Funds Data
• Research Tools
• Investment guides
  • Shares
  • Retirement
  • Short-term trading
  • Funds
  • Alt. Investments
  • Tax
  • Attend IC events
  • Understand jargon
• Events
• Q and A

requires IC Advantage

---

Subscribe today

Celebrate our 150th anniversary with fantastic savings on a joint magazine and IC Advantage subscription.

Subscribe today and save £150