Unlike the onshore fund, the North American equities Sicav has no requirement to provide income as fund manager Sebastian Radcliffe will aim for growth.
Radcliffe joined Jupiter in 1997 and manages the North American component of the Jupiter global managed fund as well as the North American income and North American equities funds.
Radcliffe combines top down and bottom up research strategies to identify themes to implement in the portfolio or avoid, with the intention of investing in good stocks that are undervalued by the market.
Once he has found a broad theme, he will look for stocks of companies that have a unique aspect to their business, such as high barriers to entry, a cost advantage that rivals firms cannot match, or intellectual property being above that of the competition.
Radcliffe will get to know as much as he can about each stock but also recognises that diversification is the best way to minimize stock-specific risk. He will also observe trading patterns for the stocks he holds, as he believes that unusual trading patterns often indicate a change in a company’s fortunes.
Jupiter says the US economy grew by 3.5 per cent in the third quarter of 2009 as the government stimulus and support packages took effect. The chairman and CIO of Legg Mason Capital Management, Bill Miller, recently said the market is underestimating potential US GDP growth in 2010. He thinks a recovery in the US could see the stockmarket rise by up to 20 per cent this year and if this pans out, funds such as Jupiter’s could be reaping the rewards.
However, Jupiter adds that the US equity market has rallied strongly since its March 2009 lows, but many investors are still sitting in cash on the sidelines.
Equities should benefit if further improvements in the economy tempt more investors away from cash, but high unemployment and the reluctance of banks to lend are holding them back. Interest rates are also likely to rise at some point and this could cause equities to pull back.