The BlackRock US Opportuunities fund is the fifth-best performing vehicle out of 96 in the IMA North America sector in one year having been firmly in the bottom quartile in the three-year term, according to Morningstar.
The fund has delivered 29.4 per cent in the past year compared with the average return of 22.1 per cent from its sector.
Manager Tom Callan, who was joined by managers Ian Jamieson and Nigel Hart in June this year, said the performance in the past few months had been driven largely by “strong stock selection” in the internet software & services sector as well as in biotechnology sub-industries.
Mr Callan said he preferred companies in the internet sector which he believed would benefit from “future industry growth in areas such as cloud-based software solutions”.
“The largest individual contributor, ChannelAdvisor, is a leading software-as-a-service company responsible for providing strategic services and thought leadership, as well as assisting on-line retailers with their inventory management,” he said.
“Additionally, the position in Textura continues to benefit from increasing demand by US commercial real estate construction firms for online construction collaboration solutions.”
Mr Callan said the second largest contributor to recent performance came from stock selection in and the overweight to stocks linked to biotechnology.
“The position in Alnylam Pharmaceuticals helped as positive clinical data bolstered the share price,” he said.
“We continue to own the company since we believe its drug pipeline will progress through the approval process and create future marketed drugs, generating higher revenues and profits.”
However, the manager acknowledged stock selection in the commodity chemicals and aerospace and defence industries “slightly detracted from performance”.
“In commodity chemicals, a slowdown in US housing starts and weaker-than-expected PVC exports negatively impacted the fund’s position in Axiall,” he said
“However, we believe that a continued US cost-advantage in natural gas, an on-going US housing recovery and an increase in export demand should boost PVC pricing for the company, benefiting future earnings.”
Mr Callan added, in spite of the housing-related positions denting performance the fund remained positioned to “benefit from continued recovery in the US housing market”.
The manager said he did not think there would be a reduction in the size of the US’s quantitative easing programme soon either.