Investors await Obama stimulus package

Although the US recession continues to deepen, things are likely to improve towards the end of the year or early in 2010, according to Robert Siddles, manager of the F&C US Smaller Companies Trust.

"Interest rates are virtually zero and the Fed is providing quantitative easing that should free up the credit markets," he explained. "In addition Obama is promising a "First Hundred Days" stimulus package to rival that of Roosevelt which got the US out of the Great Depression."

Siddles said that the dollar/sterling exchange rate has helped US funds, with his trust finishing 2008 in the black. More importantly, the fund managed to outperform its benchmark by more than 11%. Whilst the Russell 2000 Index was down 9.75% in sterling terms at the end of 2008, the F&C US Smaller Companies Trust net assets per share returned 1.5%, something that reflects the success of the manager's disciplined investment approach.

The fund invests in a diversified portfolio of quoted US smaller and medium-sized companies across different sectors and regions. "Over the last three months we have gone overweight in energy. We called the bubble in oil quite well in early summer but we think that the recent sell-off has been too great. The current weak oil prices are only going to make future shortages of oil worse and we do see attractive opportunities in the sector," he explained. "Elsewhere, we continue to focus on areas that are going to be less affected by the recession such as insurance."