Jupiter: Can middle America be a top-performing ‘emerging market’?


Jupiter’s multi-manager team says middle America could be the top-performing “emerging market” over the next few years, given the changes taking place in the world’s largest economy.

The Merlin team, which is headed by Jupiter chief investment officer John Chatfeild-Roberts, says the US “has cleansed many of her past ills” and highlights a number of factors that could boost the less developed, largely rural regions of the country.

He says: “America is growing, but the cheap and available labour force, the potentially plentiful supply of energy – if indeed their shale reserves are the bonanza that many hope – and falling input costs will be crucial for momentum to build.

“Looking over the next five years would it not be somewhat ironic, and certainly contrarian, to suggest that the best performing ‘emerging market’ might just be middle America?”

Jupiter’s Merlin team has exposure to the US through the £5.7bn Findlay Park American fund, the £804.8m Hermes US SMID Equity fund and Sebastian Radcliffe’s £49.1m Jupiter North American Income fund. They also holds the £694.2m Morgan Stanley Global Brands fund, which has 35.5 per cent in the US.

Bestinvest managing director of business development and communications Jason Hollands agrees that middle America could witness relatively healthy growth in the coming years.

He says: “The growth of the shale gas industry is clearly benefitting those towns where extraction is taking place but the broader impact over the coming years should be more widely spread through cheaper energy.

“With average wealth now at record levels in the US, low debt servicing costs and sentiment improving, the ingredients are in place for a consumer-led recovery.”