Fund to watch: M&G Amercian

Published by Rob Griffin on 19 February 2013.
Last updated on 19 February 2013

This fund, which was launched 40 years ago, aims to achieve long-term capital growth by investing in North American securities.

Aled Smith, its current manager, has the stated objective of outperforming the benchmark S&P 500 Composite Index in the long run and delivering competitive returns against the sector.

Stocks are selected on a bottom-up basis with a focus on understanding their valuation, business models and management ability, particularly with respect to how they approach the allocation of capital.

The fund holds between 65 and 85 stocks, with the largest position being Pfizer (4.9%); followed by Chevron (4.1%); and General Electric and Eli Lilly (4%). Other names within the top 10 include eBay, Procter & Gamble and Coca-Cola, according to the fund's November 2012 factsheet.

Information technology has the highest industry weighting in the fund of 18%, followed by 15.3% in industrials, 13.7% in healthcare, 11.6% in financials, 11.1% in consumer staples and 10.5% in energy.

It may have been through a challenging period - attributed largely to its holdings in energy companies - but the fund is still a favoured name among a number of advisers. It is the only fund in the sector that has been selected for a coveted place in the Hargreaves Lansdown Wealth 150 list of preferred funds chosen by Mark Dampier, its head of research.

"He (Aled Smith) focuses on firms he believes have the potential to improve, but where the share price is suggesting they never will," he writes. "Recent additions include Microsoft and Dr Pepper Snapple."

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