Is the party on the brink of US equities or should investors stick closely?

Is the party on the brink of US equities or should investors stick closely?

Recently, Peter Hargreaves, founder of Hargreaves Lansdown, recently said asset managers were always wrong in the US.

The affluent Lancastrian launched the investment platform Hargreaves Lansdown from his home in Bristol in 1981 and, at its inception in 2007, raised £ 80m.

The 72-year-old invested 25 million pounds of his own money last year in the first fund of the new business, Blue Whale Capital.

It was founded by Hargreaves' former co-worker Stephen Yiu, whom he describes as "one of the most conscientious people I've ever worked with."

The Blue Whale Growth Fund aims to provide investors with significant exposure to the US – a market that fascinates Hargreaves.

"It's the world's largest stock market and the most entrepreneurial economy in the world," he says, explaining that he has wanted to increase his investment in the country for quite some time, but found few UK fund managers to do well.

Commenting on Donald Trump, Hargreaves added, "I can not stand this new president. I think he is terrible But he makes all the right sounds. He says he will lower the taxes and regulations – America will fly. "

So far, the philosophy of Blue Whale has come true. Last year, it surpassed its peers. The £ 1,000 invested in the fund a year ago would now be worth more than £ 1,150, while the same amount in the average global fund would have risen to just under £ 1,050.

Much of the US's stellar performance lately comes from the performance of key technology stocks – the so-called FAANGs, which consist of Facebook, Apple, Amazon, Netflix, and Google's parent company Alphabet. Blue Whale holds alongside Adidas and Visa the top ten companies Alphabet and Amazon.

But the FAANGs released a mixed series of results last month and were among the most affected market disposals in October with their high valuations.

Their performance reduced the tech-heavy Nasdaq by 7.5 percent during the month, while the S & P 500 index of the largest US companies fell 6.3 percent.

Daniel Masters, head of investment research team North American researcher Brooks Macdonald, said investors should look at the market in the longer term and focus on the fundamentals of these companies instead of trading on quarterly results.

"Access to the Internet is available almost everywhere and the potential future revenue could be unlimited," he says.

Nick Ford, who manages the opportunities of US Opportunities and US Smaller Companies, notes that the increase in FAANGs is so fast and large that their rise slows.

He says, "I think investors should definitely consider small and medium sized US growth funds as part of their portfolio. Here will be the Facebook and Amazon of the future. "

And while companies in China and Japan are spreading around the world, Ford adds, "The US is one of the most open countries in the world to promote innovation and business creation." the general rising markets in the US – have scared some investors.

For the standard price-to-earnings measurement, the US is not expensive, but using the long-term, cyclically-adjusted valuation method of Professor Robert Shiller, the US market is more expensive only at the height of the 1920s and dot-boom markets been

For the standard price-to-earnings measurement, the US is not expensive, but using the long-term, cyclically-adjusted valuation method of Professor Robert Shiller, the US market is more expensive only at the height of the 1920s and dot-boom markets been

The US is not expensive in the standard price-earnings ratio, but using the long-term, cyclically-adjusted valuation method of Professor Robert Shiller, the US market is more expensive only at the height of the 1920s and dot-boom markets

Commenting on the US midterm elections, Charles Hepworth, Investment Director of GAM Investments, recently said: "In our view, there have been far better entry points into the US market than at present, and another value is better to find."

Masters disagrees. Business valuations are consistent with historical averages, and any trade agreement with China could be "a huge catalyst for the markets," he says.

Ford adds, "We have been following the US for over 20 years and we have always heard caution from British investors. They have always worried about the dollar or believe the US markets are highly valued. "

He adds that market corrections are natural and offer the opportunity to invest in promising companies at lower prices. But it takes a brave investor to focus on the US now.

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