Launching on 14 March, the fund will be the second North America-focused vehicle managed by the duo. Ford and Grieves currently look after the LF Miton US Opportunities fund, which has beat its benchmark over the last three years, producing returns of 51.9% versus the IA North America sector’s 41.8%.
Collectively, the pair have over 40 years’ experience in managing US equity funds. Ford, in particular, has an established track record investing in smaller businesses in the US. Before joining Miton, he ran the Scottish Widows Investment Partnership (SWIP) American Smaller Companies fund, which was the top performing fund in the IA North America sector for five years to 30 June 2012 with returns of 42.1% in sterling terms.
The fund will invest in a portfolio of around 70 to 100 companies with a market cap between $100m and $6bn that have “significant growth potential.”
“We consider the US to be one of the most active geographies for finding such entrepreneurial companies,” explained the fund’s co-manager, Ford. “It provides a business friendly environment which is open to new ideas and business models, while providing easy access to early stage capital.”
Initially, nearly a quarter of the portfolio will be held in financials and another quarter in IT firms. The remaining stocks will come from sectors ranging from consumer staples to energy, healthcare, industrials, materials and telecoms.
The duo added that with the passing of president Donald Trump’s tax reform now is a good time for domestic players across the pond.
“The passing of the Tax Cuts and Jobs Act at the end of 2017 added incentives to accelerate capital expenditures and bring back US historic profits stranded overseas,” said Grieves. “This provides a further, recurring windfall for US corporations and boost to confidence. Companies with more of a domestic focus are set to be the biggest beneficiaries, including small cap companies within the banking, industrials and consumer discretionary sectors.”
The Miton Smaller Companies fund will sit within the IA North America Smaller Companies sector. Its F class shares will have an annual management charge of 0.50%.
