UBS Asset Management has established its fourth UK retail fund, the US equity fund.
The fund aims for capital growth by investing in between 80 and 90 US stocks. Around 65 per cent of the portfolio will consist of large caps and 35 per cent will go in to mid caps.
Tom Digenan, a Chicago-based executive director at UBS, will manage the fund. He has been with UBS for nine years and previously worked for KPMG Peat Marwick.
When selecting stocks for the fund, Digenan will be assisted by a team of 31 analysts. They will look for companies where the share price does not reflect what they regard as its true value. However, they must also pinpoint factors which could lead to a change that will restore the real value of the stock.
The fund will look at a range of sectors and will be actively managed against a benchmark index, the Wilshire 5000. Despite its name, this index actually covers more than 6,500 stocks which include companies such as Microsoft, Citigroup and Coca-Cola.
Despite this fund's potential to offer growth if the US economy recovers, the current outlook remains negative. IFAs say US stocks are still expensive and that some investors may not be ready to return to US funds.
According to Standard & Poor's, the recently established UBS global optimal fund is ranked 124 out of 170 funds based on £1,000 invested on a bid-to-bid basis with net income reinvested over three months to October 1, 2002.