GLOBAL - Funds investing in the US faced a tough investment challenge over the 12 months to November 1, according to the latest America report comprising analysis of 88 funds just published by Standard & Poor's.
Median funds for both the overall mainstream and smaller companies universes underperformed respective index benchmarks. However within both universes managers of value style funds comprehensively outdistanced their growth competitors.
US smaller companies provide the most striking divergence in style returns. Within this universe, despite the S&P Small Cap index dipping by 6.6%, the median value fund recorded a 4.4% gain. This compared with the overall median fund decline of 27% and the growth fund’s fall of 33%.
After such a testing year the report does note some decline in the pessimism surrounding the US economy that fund managers experienced in the summer. Most fund managers interviewed believe that the US economy will improve in 2002. However there does appear to be considerable divergence in responses to the possible recovery.
James Tew, European head of research at S&P, said: It has been an exceptionally tough year for managers investing in the US. Nevertheless we have stuck to our qualitative analysis which has meant that a number of apparently underperforming funds with growth biases have maintained their rated statuses. This is almost the mirror image of the situation a year or two back when value funds maintained their ratings despite periods of relative underperformance.
By Luke Clancy
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