Bigger is better when looking at US markets

SWIP is expecting larger, globally established, companies to lead the way when US markets start to recover.

According to SWIP's outlook for the US, the market is unlikely to improve until well beyond 2009. However, SWIP's bottom-up research process is identifying companies, such as Emerson, Colgate Palmolive, Microsoft, Hewlett Packard and Cisco, which are in a good position to benefit from a recovery in the longer term because of their global reach.

Simon Moss, Fund Manager US Equities, at SWIP comments: "Bigger is better when looking at a US market recovery. We are currently analysing large global companies which have exposure to emerging market economies such as China. We are expecting these companies to do better relative to the market over the next year and recover quicker as markets improve."

In addition to this, SWIP sees the strength of the Dollar and the size of the US market as key strengths which set it apart from European markets.

Nick Ford, Fund Manager US Equities, at SWIP adds: "We expect the Dollar to remain strong relative to Sterling and the Euro. The Dollar is still seen as a reserve currency enabling the Fed to raise more capital and provide further stimuli to the market; more so than we will see in European markets."

SWIP expects to see bear market rallies continuing over the next month or two and will continue to make tactical decisions for its US funds, taking advantage of short term volatility. However, over the longer term, SWIP sees growth in mega caps as a key driver to performance. The US team at SWIP will continue to look for companies that can weather the global economic slowdown by applying its five year forecasting process.