Fund Ideas - US Equities
In this article James Davies discusses investing in the US equity market and poses some questions to Felix Wintle, manager of the Neptune US Opportunities fund.
The United States is the largest stock market in the world. It has been frequently said by many commentators and observers that the US will lead us out of the economic difficulties that we find ourselves in. Whether you agree with this or not, it is hard to argue against the view that the US is and will remain an economic powerhouse.
It’s surprising then that most UK investors rarely invest much of their portfolio in US equities. The reason for this is that historically the US market is very efficient and it’s exceptionally difficult to beat the market. A weak dollar (relative to sterling) for many years also rendered the regions equities unattractive.
Chartwell believes that the US shouldn’t be ignored by UK investors and that the sector (IMA North American) harbours one of the UK’s most impressive fund managers relative to his peers.
The Neptune US Opportunities Fund, managed by Felix Wintle, has been the number one performing North American equity fund in the UK over 1, 3 and 5 years (up to 31 July 2009). Over the 3 years to 31 July Wintle’s fund delivered a positive return of 30.9% - more than twice his nearest rival in the sector and outpacing the S&P 500 Index, which could only manage a loss of -8.8%*.
We recently took the opportunity to canvas Mr. Wintle’s views on the US and it’s place in the global economy:
Why should UK investors consider investing in the US now?
UK investors should invest in the US because the dollar is at a low level compared to sterling and therefore offers good value. The US stock market is the biggest and most diversified market in the world and offers investors access to all global themes.
What makes you include a stock within your fund?
My style is a blend, so I have growth stocks as well as value stocks in the fund. Stocks that make it into the fund are those which best express our top down (global macro-economic) views. Our top down view is the most important part of our investment process.
Can you give an example of a recent stock that you bought?
Capital One Financial. This stock has exposure to the improving consumer credit market via its credit card business.
Is the US still the most important economy in the world?
The US is still the most important economy in the world for two reasons a) it is the largest b) US companies dominate practically every single area of global trade. The emerging economies are becoming increasingly important, most notably China, and they may topple the US in terms of importance one day, but my view that day is many decades away.
What is going to be the economic impact of the ‘Obama effect’?
The economic effect of Obama’s administration will be the results of the stimulus package, which we will see in the last quarter of 2009 and throughout 2010. Areas that are likely to benefit are infrastructure, materials and industrials.
The Neptune US Opportunities fund is available through Chartwell Direct at 0% initial charge. You can invest by downloading an application form from our literature library by clicking here, or alternatively log in to your accounts online. If you have any questions please do not hesitate to contact our Investment Helpdesk on 0117 9170777.
*Source: Financial Express, August 2009.
The views expressed by the fund manager were obtained by Chartwell on 17 August 2009 and are not necessarily the views of Chartwell Group Limited.