Darius McDermott of Chelsea Financial Services is more cautious on US equities than he has been in quite some time.

While the blip in the US recovery at the start of 2014 doesn’t bother him – it has since been chalked up to icy weather, which stifled both consumption and production – he says that even a return to strong GDP growth doesn’t always make for vibrant stock market.

He explains: “With the S&P reaching all-time highs, valuations looking full and corporate profits as a percentage of GDP at post-war highs, it is hard to see the US market making headway without improved earnings growth. The bad news is that corporate earnings are flat.”

While US CEOs could change the situation by increasing investment, McDermott says, such a move could impact margins in the short term. For the moment he relies on the AXA Framlington American Growth fund, the JPM US Equity Income fund and the Schroder US Mid Cap fund to see him through the complex situation stateside. 

Gavin Haynes of Whitechurch Securities shares McDermott’s overall cautious approach – and a stake in the JPM US Equity Income fund. He says: “While we are generally underweight in the region, we also hold the Legg Mason Capital Management Opportunity fund.”

Tom Stevenson at Fidelity is a bit more constructive on the region. He says: “The US stock market has risen in more or less of a straight line since early 2009. This is great news if you were extremely brave and had great foresight in the darkest days of the post-Lehman slump. For everyone else, the question is: where next?”

Stevenson wonders whether the groundwork is in place for “a return of the cult of the equity”, not seen since the dot com bubble burst. He says: “History doesn’t repeat itself but it often rhymes – US equities could rise still further from here.”

He tips a different JP Morgan fund – the JPM US Select fund.

Stevenson’s other favourites include the Fidelity American fund and the Old Mutual North American Equity fund, which focuses on the global technology and biotech sectors.

He says: “The team’s proprietary quantitative model plays a critical role in decision-making, with the managers using five stock selection criteria, which include valuation measures, growth measures, analyst sentiment, an assessment of company management and market environment.”

Ben Yearsley of Charles Stanley likes the Legg Mason ClearBridge US Aggressive Growth fund.

He explains: “Their philosophy is simple: identify great companies that generate growth in revenue each year regardless of the economic environment. This sounds simple but managers Evan Bauman and Richard Freeman have a team of 25 analysts backing them up.”

According to Yearsley 1,100 companies presented to the team in 2013 but, he says, they only invest in companies where they have full confidence in management and feel that long-term growth trends could add momentum.

Mona Shah of Rathbone Multi-Asset Portfolios agrees with Yearsley, adding the Allianz Technology Trust – formerly the RCM Technology Trust – to her list of favourites. The trust is on a six per cent discount, she says, one of the widest in its history.

She adds: “We believe that technology provides a massive growth opportunity. It is difficult to select individual ‘winners’ so we have chosen to invest in this experienced team, whose base in Silicon Valley gives them an edge.”

Next week we’re jetting across the Pacific to reveal the best funds in Japan. 

For last week’s regional fund picks – focusing on the UK – click here.