Brewin Dolphin has tipped the Legg Mason ClearBridge US Aggressive fund as more investors flee to the safety of the US stockmarket in the face of global uncertainty.
Emerging market equities have seen significant outflows so far in 2014, exacerbated by slowing quantitative easing in the US, weak data in China and now geopolitical tensions in Russia and Ukraine.
With stockmarket uncertainty, Ben Gutteridge, head of fund research at Brewin Dolphin, said US equities have been a “major beneficiary of asset flows” away from emerging markets, and US equities remain the firm’s favourite asset class.
He said the market is set to rise further “as structural factors such as an undersupply of housing and cheap energy costs point toward more jobs and higher stockmarkets”.
Within US equities, Mr Gutteridge tipped the ClearBridge fund as a core holding for investors’ portfolios, advising people to ignore the “aggressive” portion of the name as a “legacy issue”.
“The fund is squarely focused on companies that are growing their top line earnings, but are also very cognisant of valuations,” he said. “Some of the racier parts of the biotech market and technology are likely to be avoided. This fund can be considered a core US equity holding.”
The fund, which is run by Richie Freeman and Evan Bauman, has been running in the US for more than 25 years.
The Ireland-domiciled version that UK investors can access has been running since April 2007, since which time it has returned 93.2 per cent compared to a 64.6 per cent rise in the average fund in the IMA North America sector and the 69.8 per cent rise in the S&P 500 index.
