Investors in the forerunner to the ISA, in other words Peps, are beginning to see a plethora of non-...
Investors in the forerunner to the ISA, in other words Peps, are beginning to see a plethora of non-Europe and UK investment opportunities thanks to regulatory changes introduced with the new tax year.
One such product is the Credit Suisse Transatlantic Fund, which - like other funds with a US focus - could not be used as part of a Pep investment until April this year because UK regulation only allowed Pep products to be invested in Europe and the UK.
Managing director of Credit Suisse Asset Management Ian Chimes - citing AUTIF statistics - said the fact that less than 7% of total funds under management have been invested in the US indicates the apparent reluctance of investors to look at alternatives outside Europe.
"UK investors are still Euro-centric when it comes to looking at tax-free savings despite the Government's recent liberalisation of Pep investment limits," said Chimes.
"Traditionally, the world's largest economy has been a blind spot for Pep and Isa investors."
The Transatlantic Fund has made good progress since its launch seven years ago and has succeeded in outperforming the FTSE All Share by climbing 276.34% compared to the 113.45% rise of the index.
Susan Everly, fund manager for the Transatlantic fund, is optimistic that the US Federal Reserve, the European central bank and the Bank of England will steer a global recovery in the second half of this year.
Everly said: "We remain increasingly positive in our outlook for US equities. The compound effect of Fed rate cuts, accelerating monetary growth, lower mortgage rates and the re-opening of the high yield market are all fuelling our optimism."
Despite the slowdown Everly believes opportunities are there for the taking.
"Although the sell-off in the US has been on a scale unprecedented by this generation of investors and there is certainly no guarantee that we have hit the bottom of the market, value can be found by cherry picking prime stocks and adding them selectively to a long-term tax-free portfolio."
CSAm's top 15 US holdings are Cisco, Philip Morris, Microsoft, Lockheed Martin, General Electric, Texaco, I2 Technologies, Du Pont, Archer-Daniels-Midland, SBC Communications, EMC, Freddie Mac, Ford, Coca-Cola and Intel.
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