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Which US equity funds did DFMs buy in 2022?

Asset Allocator recently caught up with Jasper Thornton Boelman, Parmenion's investment director, who disclosed he has been cutting US equity allocation by 3 per cent. 

We will return to his thoughts in more detail, and what he has done with the cash this has freed up, below but Parmenion's reduction in exposure to the asset class is something of an outlier in the current climate.

The latest Investment Association data indicates US equity funds had net inflows of £258mn in December, a month in which net flows were hard to come by for other equity asset classes. 

With demand holding up, we took a look at which funds in the space have caught allocators' eyes over the past year. 

The ructions in the US equity market in 2022 did nothing to dent demand for the JP Morgan US Equity Income fund during the year. This currently appears in the portfolios of 12 of the allocators we cover, and actually gained a net of three new DFM buyers in 2022.

The nature of the fund, seeking dividend paying equities, probably bolstered the investment case for this fund in 2022.

The top two holdings are energy companies, while financials is the top sector weighting and technology accounts for just 10 per cent, all positions which would have been positive for relative returns in 2022. 

The next most widely owned US equity fund is Fidelity Index US fund, which is held by 11 DFMs. It picked up a net of three new buyers in 2022. 

Two other less popular funds picked up three DFM buyers last year.

One of these was Premier Miton US Opportunities which is now owned by five DFMs.

This £1.6bn fund performed…well enough…in 2022 with second quartile performance. But its cumulative performance has been top quartile over one year, three years and five years.

The other fund to have picked up three buyers was BA Beutel Goodman US Value, whose name betrays its obvious attractions in the current market environment.

It has a 27 per cent exposure to consumer products like Kelloggs, Campbell Soup and Kimberly Clark - well overweight its sector.

US small cap equities also had a net inflow in December, according to the latest IA data, but DFMs look little to no action here.

The most widely-owned US small cap fund among the allocators we cover is Artemis US Smaller Companies, which is held by four of the allocators we cover but it attracted no new buyers or sellers in 2022.

That fund is managed by Cormac Weldon, and has returned 75 per cent over the past 5 years, marginally outperforming relative to the index.

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