Since the start of 2011, US equities have outperformed several of their emerging-market counterparts. This is partly because the previous decade-long hype about Bric nations left many emerging-markets equities looking pricey. By contrast, many multinational US companies now offer a cheaper way to play the dynamic growth of emerging economies.
But what to buy?
One US fund with a good track record is the Gartmore US Growth Fund. As Collins Stewart fund manager Mark Piper notes in Investment Week, “the management of the fund is outsourced… and as a result the management team has not been distracted by recent events at Gartmore”.
It is run by Denver-based Marsico Capital and has returned 30% during the last three years. It suffered less than the IMA North American Sector Average during the financial crisis and outperformed during the 2009/2010 upswing.
The fund focuses on large-cap firms that look cheap compared to their growth potential. Manager Tom Marsico eschews Wall Street brokers, preferring inhouse research, says Piper. The result is a “concentrated, research-driven, large-cap growth fund” that provides “diversification across themes and industries without sacrificing focus”.
One of Marsico’s top holdings is Monsanto. The leading US agribusiness provides seed technology and products that boost farming yields. That makes it a decent play on increased demand in emerging markets. He also places a strong emphasis on the consumer discretionary (24% of fund) and IT (18% of fund) sectors. So tech firms Oracle, Apple and Baidu all make his top ten.
Contact: 0800-212433.
Gartmore US Growth Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| Apple Inc | 5.3 |
| Dow Chemical Co | 4.3 |
| Oracle Corp | 3.9 |
| Baidu Inc | 3.5 |
| US Bancorp Delaware | 3.3 |
| Praxair Inc | 3.1 |
| Amazon.com Inc | 3.1 |
| Monsanto Co | 3.1 |
| Union Pacific Corp | 3.0 |
| Priceline.com Inc | 2.9 |