Resolution Asset Management’s American Growth fund managers are focusing on healthcare, telecoms and utilities as they seek firms able to grow margins as well as sales.

Joint managers Alison Porter and Terry Ewing, whose £128m fund has returned top quartile growth of 9.91% over the last 12 months, believe many booming US companies are sustaining their ability to meet orders for in-demand products but failing to maintain margins at the same time.

Companies they believe have avoided this trap include those in the healthcare sector, where many firms – particularly manufacturers of testing, measurement and diagnostic equipment – are benefiting from the ageing US population. Major stocks in the portfolio include Inverness Medical, which manufactures medical diagnostic products, and Hologic, a digital mammography specialist currently in the process of merging with Cytyc Corporation in a deal that will create the world’s largest female healthcare company.

The managers are also overweight agricultural companies such as Monsanto and Agco, which owns Massey Ferguson Tractors. Resolution points out that US farmers are currently enjoying a boom as rocketing Global demand for wheat and corn continues to boost their profitability.

Other overweights include aerospace and utilities, which Resolution believes offers a vehicle for investment in alternative energy strategies. The fund remains concentrated on internationally focussed companies and in particular on global brands such as McDonalds and Nike. The managers expect this international focus will be reviewed in the New Year as they expect the US economy to rebound in 2008.

Ewing said: “The key at the moment is to be nimble and pragmatic. We have managed to avoid the worst financials but we would like to see banks post further write-offs so the market can digest the news. The US is a very broad market and there are always franchises growing and executing well. Finding 60 or 70 stocks that we have real confidence in is not a problem.”