By MARK HINTON
29/11/2006
The M&G American Fund's objective is long term capital growth through investment in North American securities. It may also invest in Canada, and in companies which are listed, registered or trading within North America. The manager uses a screening process to identify those companies with a higher return than cost on capital. Further fundamental analysis is carried out to determine whether the stock represents good value.
The focus is on stock selection decisions and no top-down views are imposed on sector choices. A separate risk management team ensure proper diversification and that the intended exposure is being taken.
Smith has been using the same process successfully for the Global Leaders Fund. We have confidence in his approach but due to the relatively short track record for the American Fund, we have awarded it 3 stars.
Note that there is a significant overlap (30-40%) between the M&G Global Leaders and American Funds.