Artemis US Smaller Companies
Jake Moeller, senior investment consultant at Square Mile Investment Consulting and Research picked the £1.5bn Artemis US Smaller Companies Fund, which provides investors access to US equities further down the cap scale.
“Currently headline US share growth is being driven by large technology stocks and there is considerable concentration risk within the S&P500,” he said, adding he thinks there are compelling and overlooked opportunities further down the market cap spectrum.
“Smaller cap companies are typically more domestically orientated, and therefore offer an element of insulation from international influences.”
The fund is managed by Cormac Weldon and adopts an investment style that combines detailed company analysis with an appreciation of the wider economic environment, Moeller added.
“Overall, this has proven successful across a range of market conditions.
“We believe the team's diverse skill set and collegiate environment complements the overall investment approach.
“There is some key-person risk involved with this fund compared to a number of its competitors, but in this case we see this as an advantage, leading to swift decision making in a nimble and dynamic market.”
Findlay Park American fund
Ian Aylward, head of fund selection at Barclays Wealth & Investments said Findlay Park’s business is “hyper focussed” as it manages just one strategy in one fund with no mandates.
“It has been successfully doing this since 1997 [and] one of the founders – James Findlay – remains co-CIO.
“Whilst it takes a growth approach it does display some welcome defensive characteristics due to its ‘margin of safety’ approach regarding valuations.”
He added recent notable developments included the fund becoming Article 8 under SFDR, and avoiding investing in all social media names.
Aylward added that alongside this fund, he would also recommend Findlay Park American, Brown Advisory US Equity Growth, JPM US Equity Income, Loomis Sayles US Growth Equity and Vulcan Value Equity.
“We believe in blending investing styles through having a blend of growth and value funds.
“As such our favoured funds range across the style continuum...for the first time in several years, there has been relatively little between the returns to value stocks and growth stocks in 2021 and it is unclear which will be the winning style in 2022.”
Lazard US Equity Concentrated
Juliet Schooling Latter, research director at FundCalibre, picked Lazard’s US Equity Concentrated fund, which holds between 15 and 35 stocks and aims to outperform any broad-based US index.
“It’s one of the more interesting funds in its sector and is genuinely different to the market,” she said.
“If you are worried that some parts of the US market are extended, this is the fund for you – it only holds Alphabet out of all tech giants and is pure conviction stock picks in a handful of firms.”
T. Rowe Price US Smaller Companies Equity
Schooling Latter also picked the smaller companies fund from US-based investment manager T. Rowe.
“This fund has a flexible approach with the manager looking for both growth and value opportunities in the small and mid-cap space – so again, it should hold up in any style environment,” she said.
“The manager will allow his winners to run as long as he still believes there is a return opportunity.
“As such, the portfolio is likely to have more of a mid-cap bias than its peers and it will also invest in areas such as biotech, which other generalist funds often avoid.”
sally.hickey@ft.com
