British investors are ignoring almost half the global equity market by shunning opportunities in the US, Fidelity International says.
It says UK savers choose to invest elsewhere, despite a strong rally in the US share price.
In April, the peak of the ISA season, North American fund sales accounted for £5m, or 0.63%, of total gross ISA sales.
Five years ago, the sector accounted for 4.3% of gross ISA sales, with monthly sales of £44m.
Fidelity says the exchange rate was the chief factor, with the weak US dollar eating away at UK saver returns.
But Fidelity American Special Situations Fund manager Bob Haber says he is cautiously optimistic about the mid-term US outlook.
“There are a number of companies which are continuing to benefit from global growth and I am finding opportunities in areas such as agricultural commodities,” he says.
“Demand is being driven by the three F’s: food, feed and fuel.”
He says demand for food will continue to increase, due to global population growth of 50-70m each year.
“As this growing population starts to demand a high quality of food, so the demand for feed for cattle will also increase,” Haber says.
“This growing population, coupled with policy changes from governments is driving demand for alternative fuels.
“There are a large number of US companies well placed to benefit from these trends.”
Haber also nominated the US housing sector as an interesting market.
“Prices have now begun to fall in many areas and may well continue to do so, but data from the housing market is not uniformly poor and we have recently seen a pick-up in sales of new houses,” he says.
“This may be more to do with price cuts to clear inventory, but it does show that there is still an appetite for new housing.”
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