Barings Asset Management believes there is still potential for growth in US equities.
The fund manager says US companies should experience a 7 per cent growth in earnings. This, coupled with a low interest rate environment, will lead to a 8 to 10 per cent market increase in the S&P 500 stockmarket index.
Barings upbeat forecast is based on its expectation of an increase in Information Technology productivity within the US.
This emphasis on IT is a result of a radical change within the US economy, which has seen the S&P 500 index change to reflect this.
Barings says the winners of this change are the service industries including IT, finance and health care. It says 30 years ago these sectors represented less than 20 per cent of the index, but this has now grown to over 45 per cent.