US funds to get you on your fair way
In light of the US golf open starting today Sheridan Admans, Investment Research Manager at The Share Centre, outlines three US funds from our P120 list of preferred funds that may set investors up for a hole in one.
JPM US Equity Income fund
“The JPM US Equity Income fund reappeared in our top traded funds list during the month of May for the first time in four years, perhaps demonstrating investor appetite for alternative income opportunities from around the world. Managed by Clare Hart, the team look for companies which they believe are undervalued, offer above average dividend yields, are able to sustain the payments and, finally, have good management, leading to an added attraction for income investors.
“Many of the top 10 holdings within this portfolio at present are large multinational names who generally are familiar to us in our everyday lives such as Pfizer, Merck & Co, Johnson & Johnson, Exxon Mobil and Apple. The fund aims to beat the yield of the S&P 500 Index by more than 1% while producing the potential for capital growth. This fund is suitable for investors seeking some large and mid-cap equity income exposure from the US who believe that the economic expansion story still has some way to go.”
Legg Mason Clearbridge US Aggresive Growth fund
“Driven by a pure bottom-up stock picking approach, the Legg Mason Clearbridge US Aggresive Growth fund generally looks to hold between 50 and 70 stocks, with no attention given to the benchmark. Conviction is given to the top 10 holdings, which generally comprise around 50% of the overall portfolio, while the remainder and tail aid the portfolio’s development.
“The managers of the fund seek to identify opportunities from across the market cap spectrum. However, with an extremely low portfolio turnover rate and a strict valuation discipline, investors are unlikely to see any significant changes to market cap and sectorial exposure in the short term. This fund is suitable for those investors seeking growth from their investment, but with a core US focus.”
Schroder US Mid Cap fund
“Managed by Jenny Jones who has over 30 years investment experience, and nine years at the helm of this fund, the portfolio selection concentrates on companies sized between US$1bn to US$7bn range - an investment universe of approximately 1,200 companies. Having undertaken both qualitative and quantitative research, the portfolio will typically comprise of between 60 to 90 stocks. This is then broken down so around 50-60% of the portfolio in companies Jenny believes offer superior growth, 20-30% in those which are deemed to be steady growers and finally 20-30% in companies deemed to be turnaround situations.
“With a management team based in the US, access to the companies the fund invests in is more readily available compared to other US funds managed outside of the country. This fund is suitable for those investors wishing to add diversification to a US holding away from the mainstream large cap funds. In addition, it offers an investor the opportunity to benefit from potentially higher growth of small-mid size companies compared to large cap peers.”