Opportunities in US insurance stocks

F&C US Smaller Companies investment trust manager Robert Siddles has been building the trust's position in non-life insurance underwriters, in a defensive move that seems vindicated by a bout of jitters in the US stockmarkets over the past week, which has seen 5% wiped off the value of the S&P 500 index.

As well as increasing the £61m trust's exposure to existing holdings in the sector, Siddles has bought stakes in two new ones, Markel and WR Berkley.

The manager said: "We have bought disciplined underwriters that operate in niche lines of business and were able to buy the shares at around book value. We think this is a low-risk way of achieving long-term capital growth because underwriters like these are able to grow their book value consistently."

Siddles says the move into insurance is defensive after such a strong run in the market. "We hold 8.5% of the portfolio in non-life insurance underwriters," he added.