Schroder US Mid Cap fund

Andy Parsons, Advice team manager at The Share Centre, explains how investors wishing to add broader diversification to a US mainstream holding, could benefit from the Schroder US Mid Cap fund.

"Despite suffering the most severe economic downturn in modern times, many fund managers still consider America to be the most promising developed market in the world, and with good reason. Take the Schroder US Mid Cap fund, for instance.

"The fund aims to provide investors with capital growth and income through investment in equity securities of mid-size US companies, with market capitalisation of between $1bn and $7bn. At the end of August, the fund had a total of 99 holdings with its top ten holdings representing 24.7 per cent of the fund, and a total fund size of £244.5m.

"Year-to-date, the fund has returned 16.08 per cent compared to the IMA Northern American Retail sector, which has returned 12.43 per cent. It's this kind of performance, coupled with the fund's strong historic track record, which has seen the Schroder US Mid Cap fund achieve an OBSR ‘AAA' rating.

"The fund has been managed by Jenny Jones since its launch in April 2005. Impressively, her investment experience spans some 29 years and unlike many US fund managers Jones is based in the US. It's Jones' research-orientated style of management, emphasising bottom-up stock selection, a diversified stock portfolio and an experienced and committed US Mid Cap team, which has contributed greatly to the fund's success.

"Typically, the portfolio comprises of 60 to 90 stocks. Of these, 50-60 per cent are attractively-priced superior growth companies, 20-50 per cent represent companies with dependable earnings and revenue, and 0-20 per cent are companies undergoing positive changes not widely recognised by the market.

"We rate this fund as medium risk as it offers an investor the opportunity to benefit from potentially higher growth of mid-size companies compared to its large cap counterparts."