The US Alpha Plus Fund will be launched on 14 December and will invest in up to 50 stocks, benchmarked against the S&P 500.
It will be managed by head of US large cap equities Joanna Shatney, who joined the firm in 2005 and currently manages the offshore Schroder ISF US Large Cap and Schroder ISF US All Cap funds.
Since its launch in December 2010 she has also managed the $5.3m offshore Schroder ISF US Equity Alpha Fund, of which the new offering is a UK equivalent.
The existing offshore fund is a slightly more concentrated portfolio, with 31 stocks, and compared to the S&P 500 benchmark it is overweight materials, utilities, IT and consumer discretionary. In terms of cap size it is heavily biased to large caps with 89.8% invested in companies worth $5bn or more.
Her strategy is to exploit what she sees as a ‘growth gap’, scenarios where Wall Street has underestimated earnings potential.
“While Wall Street is typically focused on quarter-on-quarter earnings,” she adds, “we believe our ability to see the bigger picture, looking out over the next three to five years, is one of our key competitive advantages.”
US ‘relatively attractive’
At a conference this morning, chief investment officer at Schroders Alan Brown, talked about the investment case for the US, which he said was far from lacking in headwinds.
As the US is going into an election year he said nothing meaningful would happen with fiscal policy until 2013, but if there was sufficient will at the start of the next term then the fiscal problems would be "perfectly manageable".
"You have got to put your money somewhere and the US economy is far more flexible than its developed market counterparts. It is not insulated from problems in the eurozone but it is further removed from them.
"In among the places where you can go the US looks relatively attractive, but we are talking about relative attraction," Brown added.
He pointed to the unique position the US has as home to the world’s reserve currency and said that would help the country "muddle through".
However, he added there could still be scenarios in which markets turned their attention to the US or UK – which would become more likely next year as the eurozone crisis comes to a head one way or another.
The US Alpha Plus Fund will compliment Jenny Jones’ £768m US Mid Cap Fund as well as her £460m US Smaller Companies Fund, though it sits more comfortably in the firm’s Alpha Plus range which now totals six.
The others in this range are the UK Alpha Plus (managed by Richard Buxton), European Alpha Plus (Leon Howard-Spink), Asian Alpha Plus (Matthew Dobbs), Japan Alpha Plus (Nathan Gibbs) and Global Alpha Plus (Virginie Maisonneueve).
