Trend towards US retail is over before it's begun

Outperformance by second tier US retailers is unlikely to last as investor sentiment is now switching back to large cap growth opportunities, according to Clerical Medical. James McLellan, fund manager of Clerical Medical American Growth, believes the recent popularity of stocks such as JC Penney and Federated Department Stores was a reaction to cuts in US interest rates and not the beginning of a long-term trend. He says: "The change in investment strategies was due to the slowdown in the US economy. "The demand for higher P/E stocks had depreciated in recent months and traditi...