The second new holding is Wellington US Research Equity Fund, which leverages the asset manager’s research expertise by combining 28 separate analyst portfolios, each one industry specific.
“There are strict limits which ensure that industry weights are closely aligned to those of the S&P 500 and this results in a fund with returns driven by good stock selection,” Hambi explains.
“The style of these ‘sub-portfolios’ will vary but thanks to careful monitoring; factor bets are minimised to give a blend which has historically had only a slight bias towards quality and growth.
“The careful construction gives a fund which has a long history of strong performance and while remaining mindful of the slight growth bias, is worthy as a core part of our US allocation.”
Despite the S&P 500’s recent highs, Hambi remains confident on the prospects for US equities going forward given the pro-business Trump administration and interest rate cycle.
“Despite rising nominal interest rates, we expect valuations to remain supported while the Fed remains behind the curve leading to anchored real rates,” he said.
“The potential for a stronger US economy has filtered its way through to other economies primarily through the exchange rate.”
