It is hard for UK investors to ignore the US. Despite China’s best efforts, it still comfortably remains the world’s biggest economy, accounting for around half of global stock markets by market capitalisation and nearly one fifth of the world’s gross domestic product.

The US economy is much further down the road to recovery compared to the likes of the UK and Europe.

The modest growth the economy experienced in the first half of 2013 was mainly down to bright spots in the housing and manufacturing sectors.

The outlook also looks promising with GDP growth forecast by the International Monetary Fund at 1.9% for 2013 and 3% in 2014.

Longer term trends including shale gas exploration are also set to transform the US economy. Lower energy costs would help make the US progressively less reliant on energy imports and reduce the costs of US manufacturing at the very time wage inflation is rising in China.

Of course, there are two sides to the story and risks still exist. The biggest is the early withdrawal of the quantitative easing programme. As the economic data, such as unemployment falling below 7%, improves it puts pressure on the Federal Reserve to roll back on further QE.

Recent comments by Fed chairman Ben Bernanke around the potential tapering down of QE rattled both bond and equity markets in recent weeks.

The US has also not addressed its budget deficit and it lacks a plan to reduce its debt, a critical headwind.

However, the US stock market has performed well in recent years having returned 103% since March 2009 compared to the FTSE 100 and the FTSE Europe Ex UK which have returned 80% and 62% respectively.

From a valuation perspective, the stock market is not cheap. It is around its long term average valuation with a P/E at 21.98 compared to 23.8 times earnings.

Even so there are areas of the US market that remain attractive.

“The US has a long history of encouraging entrepreneurs to develop and grow business. The US has a large smaller companies sector which is full of businesses looking to grow into global leaders. Investors should make sure they have some investment in the US market within their portfolio,” says Hargreaves Lansdown’s Adrian Lowcock.

The challenge for investors is how to access the US market. Analysis by Hargreaves Lansdown shows that large cap active fund managers continue to struggle in the region with only 3 out of 77 funds in the IMA North American sector out-performing the S&P 500 over 3 years and 6 out 68 able to do so over a 5 five year period.

Having said that, some funds stand out from the crowd, according to our expert panel:

Jason Hollands, managing director of Bestinvest

GAM Star GAMCO US Equity

We have recently given this fund a new five-star rating and added it to Bestinvest’s Select platform. New to the UK, the fund is managed by Mario Gabelli, who has a 20 year track record of managing a US mutual fund.

This is a value fund which will target companies where there is a catalyst to unlock value, such as a corporate restructuring. Gabelli and his team of more than 30 analysts at GAMCO are particularly successful at encouraging company to company M&A deals between global industry leaders, especially in the food, drinks and consumer sectors. Some transactions can take a long time to work through so this fund is more suitable for long term investors.

Aviva Investors US Equity Income

This is managed by US-based River Road Asset Management. The value-orientated strategy of the fund looks right across the capitalisation spectrum in the US. The fund currently has as a 2.8% yield.

Legg Mason US Equity Income

The fund is managed by US manager ClearBridge Investments which is part of the Legg Mason Group. The fund has a bias to larger companies and currently has a yield of 2.3%.

Adrian Lowcock, senior investment manager at Hargreaves Lansdown

HSBC American Index

Active fund managers have struggled to out-perform and add value in large companies in recent years, making low cost passive funds an attractive alternative as part of a diversified portfolio. This fund gives investors access to the 500 largest companies by tracking the S&P 500. Cost is critical to investor returns for tracker funds and HSBC fund has an annual management charge of 0.25%.

Legg Mason US Smaller Companies

Lauren Romeo, manager of the Legg Mason US Smaller Companies fund, has used bouts of stock market weakness to invest in companies trading on attractive valuations. She sees the US economy as being on a recovering trend so has not been afraid to add companies that she believes could benefit. This has led to a bias towards technology, industrial and energy companies. There is an emphasis on quality running through the portfolio and all holdings tend to share certain characteristics. Lauren Romeo prefers businesses with low debt, strong cash flows and management teams that sensibly reinvest this cash to grow the business. She also likes companies with international operations, especially those seeing demand from faster-growing emerging markets.

Rob Pemberton, investment director at HFM Columbus

Finding a US equity fund that consistently outperforms the index by more than 2% per annum on a long term basis is notoriously difficult so the US is the one asset class in the market where we predominantly use a tracker rather than an active fund. We use L&G US Index Trust which produced a return of 77%% over the last 5 years versus the IMA North America sector average of 68.2% – which is rather a vote for ‘passive’ over ‘active’ investment in this sector. The S&P500 Index has produced a sterling adjusted return of 79.8% over the same five years

One active fund we do recommend is the Schroder US Mid Cap Fund which has produced a return of 81.5% over 5 years

Another popular fund, though not one we are currently recommending, is Axa Framlington North American Growth Fund which has returned 73.8% over 5 years.