Fund review: Wells Fargo US fund

Fund review: Wells Fargo US fund

Wells Fargo has launched the US Select Equity fund, an all-cap strategy. The fund will be managed by Chicago-based Richard T. Weiss, a managing director and senior portfolio manager for the Select Equity team at Wells Capital, one of the affiliated investment advisory companies within Wells Fargo.

The fund will primarily invest in the equity strategies of between 30 and 40 US companies and will be of any market capitalisation.

At least two thirds of the fund’s total assets will aim to be invested in equity securities of US companies and the other third will be in non-US issuers through equities denominated in US dollars but issued by non-US companies. The fund will have the ability to hold futures, options or swap agreements as well as other derivatives.

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The retail share class has an expected total expense ratio of 1.95 per cent.


Analysts have predicted a recovery in the US and it looks set to continue, so now may be the prime time to start investing in the country.

Wells Fargo is a well-known group, although it has only ventured to Europe within the past few years. Buying and selling a specific country fund can be difficult due to time zone issues, but the managers will be based in Chicago, so any risks that could come with time problems should not be a problem if owning this fund.

The US is one of the most influential markets in the world and many global economies are either directly or indirectly correlated, so having exposure to the US directly could bypass other riskier markets.

It is important to note that, while this fund claims to be benchmark agnostic, it will still be compared to two major indices in the US.

The Russell 2000 is a small-cap index of the bottom 2,000 stocks in the Russell 3000 index, while the S&P 500 is nearly the opposite, an index based on the market capitalisation’s of the 500 largest companies.

It should be remembered that a small-cap US equity could be the same size as a large-cap UK firm, as market cap does not translate across the Atlantic.

With this in mind, the fund will have a wide remit and while it could see some stability in the larger stocks, may see growth – or added risk – in the smaller companies.