Best performing funds this summer
It’s the St Leger this Saturday – the oldest of Britain’s five horse-racing...
With Independence Day almost upon us, we at FundCalibre, decided to have a look and see whether US equity investors have anything to celebrate.
If you go by averages, the answer is yes. Looking back over the past 90 years or so, the average US bull market has lasted 8.9 years with a cumulative total return of 468%¹. The current bull market has lasted roughly 8.5 years and returned 300%².
Views are very much polarised, however. Oppenheimer Asset Management’s chief investment strategist expects the bull run to continue, as more investors come in off the sidelines out of cash and into stocks. JP Morgan and Bank of America, on the other hand, have warned of a ‘collapse’.
Managed by Hutch Vernon and Mike Foss, this fund was launched in the UK in 2014, but a parallel version has been run by Hutch for more than 20 years in the United States. Hutch and Mike use a flexible strategy. Improving businesses with management change offer particular appeal. They invest in a wide universe of US stocks and have a low turnover.
Run out of New York by Jenny Jones and her team of analysts, this fund has a focus on small and medium-sized companies. To help manage risk, stock ideas fall into three different buckets. ‘Steady eddies’ or less cyclically-sensitive stocks act as ballast in the portfolio. ‘Mispriced growth’ are stocks where Jenny feels the market has not fully understood the company’s earnings potential. The last, and smallest, bucket is recovery type situations.
This extremely concentrated US fund typically holds no more than 20 to 25 companies, ranging in size from the fairly small all the way through to the very large. It contains the best ideas from across Lazard’s US equity funds. While the strategy was launched in 2003, the fund only became available to UK investors last year. It is genuinely different to the market and has consistently beaten the S&P 500, outperforming in the majority of calendar years since its launch, which is no mean feat.
¹Source: First Trust Advisors LP, Morningstar returns in US dollars from 1926-31 March 2017.
²Source: FE Analytics, total returns in US dollars, 9 March 2009 to 28 June 2017.