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US funds top May league tables

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Funds investing in North American smaller companies took the top spot in the performance league tables in May, with the best performer up 9%.

Legg Mason US Smaller Companies was the fourth best performing fund out of all funds in all sectors last month. The average fund in the North American Smaller Companies sector was up 7%.

This is despite last month’s hint from Federal Reserve boss Ben Bernanke that the US may start to taper off its monetary policy that’s currently being used to stimulate the economy.

Adrian Lowcock, senior investment manager at Hargreaves Lansdown, said: “Stock markets continued their strong run in the first half of May. In the second half Ben Bernanke, the Federal Reserve’s Chairman, suggested the US may stop QE should the economic data suggest it.

“This sent shivers through the US stock market and had a more dramatic effect in Japan with the Nikkei 225 falling 7% in one day. A reminder to investors of the importance of the US and if it sneezes the rest of the world catches a cold.

“The US was the best performer in May taking the two top positions. The US stock market is not cheap but it is full of world leading companies and has a well-earned premium to other developed markets because the Americans have fixed their banking system and are stimulating economic growth.

“Economic data out this week culminating in US unemployment figures due on Friday should give further indication on the strength of the recovery. It is important to bear in mind the US has not addressed the trillions of dollars of debt and the country is not out of the woods yet.”

Gary Reynolds, chief investment officer at Courtiers Wealth Management, said: “I think everyone is beginning to realise that by tackling most of its problems head-on at the start of the crisis, the US is closer to putting the credit crunch behind.

“US GDP performance is much better than Europe and it’s banks are in much better shape too. Also, as world growth is slowing, particularly in China, countries that have export dependent economies (China, Germany, Japan and the Asian Tigers) are likely to fare much worse than countries that are much less export dependent, like the US.

“And if you are going to increase your equity weighting its likely to be in the US first as it accounts for over 50% of developed economy market capitalisation. Finally, the other investment classes are no longer looking so attractive relative to equities and carry their own risks. So investors are now concerned about gold and bonds, which makes equities look relatively more appealing.”

The European sectors also put in a good performance in the league tables and unlike in the US, valuations in the region continue to be low. However UK investors continue to be under exposed to the region – most recently due to the on-going bailouts of eurozone countries and concerns over a possible Euro break-up.

A recent forecast by Pictet Asset Management predicted real GDP growth rate of the US to be around 2.3% p.a. with the eurozone much lower at 1.7% p.a.


Top performing Funds May 2013

Name                          IMA       % Growth     Rank   
Bailie Gifford Global Growth Global  13.31 
Bailie Gifford Global Discovery A Acc  Global  10.45 
Legal & General Global Environmental Enterprise R Acc  Global  10.01 
Legg Mason US Smaller Companies A North American Smaller Cos  9.36 
Melchior North AMerican Oppurtunities USD A Acc North America    9.35
FF & P US Small Cap Equity  North American Smaller Cos  8.78 
BlackRock Overseas Acc  Global  8.69 
JPM US Smaller Companies A Acc  North American Smaller Cos  8.45 
Neptune Euroean Oppurunties AS Acc GBP  Europe Excluding UK  8.43 
Legg Mason Capital Manangement Oppurtunity A Dis A USD  North America   8.41   10
 Source: LIPPER 30th April to 31st May 2013


Top performing IMA Sectors May 2013

 Name                  % Growth     Rank   
 IMA North American Smaller Companies      7.30           1
 IMA North America       6.00            2 
 IMA Technology & Telecoms    5.76       3
 IMA European Smaller Companies    4.95       4
 IMA Europe Excluding UK     4.82        5
 IMA Europe Including UK  4.18      6
 IMA Global     4.04       7
 IMA UK All Companies    3.78       8
 IMA China/Greater China    3.68        9
 IMA UK Equity Income   3.21      10

 Source: LIPPER 30th April to 31st May 2013









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