Guided architecture Fund Range Spotlight
Threadneedle American Fund
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Following on from our article last month on The M&G Global Emerging Markets Fund, we are focusing this month on the Threadneedle American Fund.
In 2012, we worked with ILIM and Morningstar OBSR, an independent investment research and consultancy business with one of the largest and most experienced fund research teams in the UK market, to introduce the Guided Architecture Range of funds in order to further enhance the choices available to trustees, consultants and pension scheme members.
The Threadneedle American fund is positioned as a relatively core portfolio of US equities, with a modest growth bias.
The fund manager seeks to generate outperformance from research-driven, bottom-up stock selection. The approach is dynamic, and the fund management team aim to be responsive to the prevailing environment with a view to generating strong performance across the investment cycle. Given its reasonably core mandate, the fund has a large-cap bias, although the manager also seeks to generate value by dipping down into mid-cap stocks. However, he is particularly mindful of position sizing in order to keep the large-cap-centric structure of the portfolio in place.
Threadneedle is owned by Ameriprise Financial, a financial services provider that was spun off from the American Express credit card group. Threadneedle’s strengths lie in UK and US equities, property, and high-yield fixed income, with the majority of the group’s assets invested in equities.
Since June 2011, the fund has delivered solid returns for investors in absolute terms: 13.6% annualised (to the end of September 2013, source: Threadneedle Investments). The fund has lagged the S&P 500 index over this relatively short period, but has outperformed a peer group of similar US equity funds by more than one percentage point per annum. It is also worth noting that the manager’s longer-term record with the Threadneedle American Select fund is strong, ahead of the index and similar peers over his tenure from December 2001.
In Morningstar OBSR’s opinion, the manager’s experience in applying Threadneedle’s successful approach to US equity investing since the late 1990s makes this a compelling offering for investors seeking core US exposure in what is a challenging sector.
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