US funds deliver best returns in May, says Hargreaves Lansdown


Funds investing in the US racked up the best average performance in May, data from Hargreaves Lansdown shows, despite the setbacks to the rally in the latter half of the month.

According to the investment supermarket, the average fund in the IMA North American Smaller Companies sector rose by 7.3 per cent over the four-week period while the IMA North America sector rose by an average of 6 per cent.

Hargreaves Lansdown senior investment manager Adrian Lowcock says: “The US stockmarket is not cheap but it is full of world leading companies and has a well-earned premium to other developed markets because the Americans have fixed their banking system and are stimulating economic growth.

“Economic data out this week culminating in US unemployment figures due on Friday should give further indication on the strength of the recovery. It is important to bear in mind the US has not addressed the trillions of dollars of debt and the country is not out of the woods yet.”

IMA Technology & Telecoms was the third best performing sector in May with an average return of 5.76 per cent. It was followed by IMA European Smaller Companies, IMA Europe Excluding UK and IMA Europe Including UK, which rose by 4.95 per cent, 4.82 per cent and 4.18 per cent respectively.

“European sectors put in a healthy performance in May and, unlike in the US, valuations in the region remain low,” Lowcock says.

“Typically UK investors are under exposed to the region, most recently because of the ongoing bailouts of Eurozone countries. However as fears of a collapse of the euro fade investors are becoming less risk averse to the region.”

In terms of individual funds, Richard Bell’s Baillie Gifford Phoenix Global Growth was the top performing over the month after growing by 13.31 per cent, followed by Douglas Brodie’s Baillie Gifford Global Discovery and Robert Dowling’s Legal & General Global Environmental Enterprise.