Henderson director of fund of funds Craig Heron says the Fof team expects to bolster its exposure to the US towards the end of the year.
Heron says there is great value in high-quality stocks in developed countries and singles out the US in particular, pointing to the high yield on offer to boost the potential returns.
He says: “Higher-quality stocks underperformed last year in the speculative rally on a glo-bal basis and are continuing to underperform this year, particularly in the US. You have strong balance sheets there as well as conservative earnings estimates as they are well established blue-chips.
A number of them pay good dividends and they look cheap.”
Last month, Heron and fellow multi-manager Mark Harris bolstered downside protection in their portfolios as they believe the FTSE 100 will fall to4,800 in the next couple of months. They placed a put option covering 5 per cent of their FTSE 100 exposure, meaning that around 15 per cent of the multi-manager portfolios are now hedged.
Heron says: “We would be looking at the likes of income providers, for example, the JPM US equity income fund, but we can play this through ETFs as well to get the desired returns.”
Last week, the Bureau of Economic Analysts revised down the US rate of economic growth in the second quarter to 1.6 per cent.