HEAD-TO-HEAD: Miton versus Schroders

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Darius McDermott, Chelsea Financial Services and Fund Calibre

Introduction

Risk-off sentiment prevails and fund and wealth managers are largely defensive, preferring slight overweights to selected US equities while underweight or neutral to the other key regions.

Several asset managers believe in the sustained strength of the US economy. Eastspring Investments, for example, prefers US equities over all other markets, despite the US-China trade dispute.

State Street Global Advisers is also positive on the asset class amid significant policy support by the Federal Reserve.

Likewise, Oreana Financial Services is also overweight selected US equities.

“Historically, there’s been US equity managers who provide reasonable downside capture,” Isaac Poole, Oreana’s chief investment officer, said recently.

“We’ve taken defensive equity positions in the US and moved away from high beta plays in Asia and China. When there’s a downturn, those are the ones going to get hit in an absolute sense,” he said.

The US equity market has also continued to outperform the global market. Year-to-date, the S&P 500 returned 21.72% while the MSCI AC World Index lagged with 17.65%, according to FE data.

Against this backdrop, FSA asked Darius McDermott, managing director at Chelsea Financial Services and Fund Calibre, to compare two US equity funds: the LF Miton US Opportunities Fund and the Schroder US Mid Cap Fund, which are only available to professional investors.

Source: FE Analytics and Morningstar Direct

*16 September 2016 – 18 September 2019

**17 September 2016 – 13 September 2019

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