FUND FOCUS/AMERICAN EQUITY:Best performer five-year: VAM Funds US Micro Cap Growth Fund +12.44%, Worst performer five-year: Irish Life Fidelity American Growth -22.4 %
With the volatility of global equity markets over the last few years, American equities might not seem like the most attractive investment, but US securities are still a part of most diversified investment portfolios.
Taking a medium- to long-term perspective, data from MoneyMate show that in the five-year period to November 1st, 2010, American equities returned -7.8 per cent on average.
VAM Funds’ US Micro Cap Growth Fund, was the best performer, returning +12.44 per cent over the five-year period, with Eagle Star 5 Star 5 Americas coming in at 5.3 per cent.
At the other end of the spectrum, Irish Life Fidelity American Growth was down by 22.4 per cent.
MoneyMate points out the diversity of performance is down to the fact the funds included in the category invest in different-sized cap equities, such as large-, mid-, small-, and micro-cap companies.
VAM is a Luxembourg boutique fund management company, whose American equities are managed by Driehaus Capital Management in Chicago. The company’s focus on micro-cap companies appears to have paid off, with VAM by far the best performer over the five-year period.
According to Nigel Watson, sales director of VAM, the fund typically has 40-90 individual holdings. Some 30 per cent is in information technology, with a particular focus on cloud computing and manufacturers of components for LED equipment. A further 14 per cent is in consumer discretionary, 27 per cent in industrials and 17 per cent in healthcare: “Our strategy is to invest in the Apples and Microsofts of tomorrow,” says Mr Watson. “One of the reasons for the strong returns over the full investment cycle is that we don’t have style drift. We won’t let the fund get too big and will self-close if necessary so we don’t have to invest across the whole benchmark.”
He says American equities are still an attractive investment.
A spokesman for Irish Life said its Fidelity American Growth Fund was no longer available. Its negative return is attributable to a 20 per cent currency depreciation over the five-year timeframe, while American equities generally have underperformed, he said.
