North American funds were popular with investors searching for yield at the end of 2014, but the sector has experienced difficulty so far this year. According to the Investment Association (IA), North American funds experienced outflows of £356m in February 2015, making it the largest level of outflows since 1992. Speculation that the Federal Reserve could raise interest rates later on this year caused US stocks to fall. Low commodity prices have had a negative impact on the Canadian economy, as oil is one of the country’s primary exports.
The North America sector, with a total of 128 funds, must have at least 80 per cent of its portfolio invested in funds in the United States and Canada. This sector offers UK investors a way to diversify their portfolio into an area which they are farmiliar.
The best performing fund is currently the Janus Capital Funds Opportunistic Alpha fund, which is managed by Daniel Kozlowski. The $88.2m (£59.5m) fund invests primarily in stocks within healthcare, consumer cyclical, technology and industrials, with 95.2 per cent of allocation in the US, 2 per cent in emerging Asia, and 1.9 per cent in Canada.
CF Richmond Core Fund, managed by Joss Smith, is at the bottom of one-year performance in the North America sector. The fund invests in cash and stocks, with a focus on technology, healthcare, industrials, and consumer cyclical sectors. Regional focus is 92.9 per cent in the US, 2.6 per cent in the eurozone, and 1.9 per cent in the Middle East.
| Top 5/Bottom 5: North American funds, one year to 7 April 2015 | |
| Top 5 | |
| Janus Opportunistic Alpha A USD Inc | £1,364 |
| Old Mutual North America Eq U1 GBP Acc | £1,328 |
| Janus US Twenty A USD Inc | £1,299 |
| Scottish Widows HIFML US Strategic 1 | £1,298 |
| New Capital US Growth A | £1,291 |
| Bottom 5 | |
| GAM Star US All Cap Equity GBP Ord Acc | £1,166 |
| Old Mutual Threadneedle Am Sel A | £1,164 |
| Jupiter JGF North American Eqs L £ A Inc | £1,156 |
| Boston Company US Opportunities GBP | £1,152 |
| CF Richmond Core I | £1,113 |
| Sector average | £1,223 |
| Figures as at 7 April 2015, based on £1,000 initial investment. Source: Morningstar | |
