Funds: Invest in companies, not economies
Sep 25, 2009
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The US economy faces an uphill struggle, particularly compared to its more nimble emerging market rivals. With unemployment still rising and the banking system and housing market vulnerable, US growth is likely to remain sluggish for years. So surely it's the last place to invest in right now?
But it's a mistake to focus on the wider economy, says Felix Wintle, manager of the Neptune US Opportunities Fund. "We're investing in companies, not in GDP." And his approach has certainly paid off.
Over five years, the fund is up 90% against a 5% rise for the S&P 500. An alumni of the City of London School, Wintle intends to invest the fund's 9% cash position over the next few weeks, as he expects the rally to continue in the fourth quarter. This may look like the thinking of a perma-bull, but Wintle is cautious when it counts. He went into the credit crisis in 2007 with no banks in his portfolio.
Currently, healthcare is the biggest sector in the fund, as Wintle feels it has been unjustly neglected by investors. "President Obama's reforms are nowhere near as damaging to the industry as was feared." There were concerns, for example, that Obama would push through price caps on drugs to keep costs down for patients, but this hasn't materialised. Within healthcare, he likes Pfizer, the biggest drug company in the world. "It's very, very cheap, on a p/e of eight and a yield of 5%." He is also a fan of Thermo Fisher, a life science tools company that makes everything from laboratories to software.
"History has shown that outperforming the S&P 500 over the long term is extremely difficult. The Neptune US Opportunities Fund has managed this over the past five years," says Hargreaves Lansdown, which reckons the fund should continue to impress in the future. Contact: 01268-443920.
Neptune US Opportunities Fund top ten holdings
| Name of holding | % of assets |
|---|
| Healthcare |
20.1 |
| IT |
18.0 |
| Energy |
13.7 |
| Consumer staples |
8.8 |
| Materials |
8.6 |
| Money market |
8.1 |
| Consumer discretionary |
8.1 |
| Financial |
6.4 |
| Industrials |
4.7 |
| Utilities |
2.4 |
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