Making a case for US global stocks

What does a fund manager do when they move to a new job and find themselves in charge of a fund with performance that is, to say the least, uninspiring? The answer is that they restructure its portfolio pretty quickly. That is exactly what Katherine Garrett-Cox has been doing with Aberdeen North American, since her arrival as head of US equities at Aberdeen Unit Trust Managers at the beginning of September.

What does a fund manager do when they move to a new job and find themselves in charge of a fund with performance that is, to say the least, uninspiring? The answer is that they restructure its portfolio pretty quickly. That is exactly what Katherine Garrett-Cox has been doing with Aberdeen North American, since her arrival as head of US equities at Aberdeen Unit Trust Managers at the beginning of September.

Ms Garrett-Cox had built up a strong reputation as a manager of US equity portfolios, most recently with Hill Samuel, the fund management arm of Lloyds TSB.

At Hill Samuel, Ms Garrett-Cox ran that group's Dollar Trust, which then became its American Growth Trust, a fund which built up a strong track record during the US bull run of the mid-Nineties. On arriving at Aberdeen, she was faced with a different type of portfolio. "We had a successful formula at Hill Samuel and I am trying to replicate that here. The biggest change has been to reduce the number of holdings in the portfolio," Ms Garrett-Cox says.

One of the core themes the fund is currently following is based on the global pre-eminence of the US economy. "A common theme is to buy US stocks which we think will do well on a global basis. So, as the interest rate environment has become friendlier, the fund has selectively increased its weighting in the financial sector. We like banks but are looking for financials with global scope, like American Express or Citigroup. We realise that the US economy will not be the best every month, so we are also looking for companies that can play growth themes elsewhere in the world."

She adds: "The fund should be more attractive now to investors who want to get a broad exposure to North American equities. We are looking at key themes in key sectors, such as power generation."

Another key theme is healthcare. "There are long-term growth trends driving the sector, not just the pharmaceutical companies but things that play on demographic change, such as healthcare insurers, hospital companies and medical device manufacturers."