Threadneedle launches US Contrarian Equities fund

Threadneedle has launched a SICAV version of the $1.5bn US Contrarian Core fund run by sister company Columbia Management.

The Threadneedle US Contrarian Core Equities fund is managed by Guy Pope, senior portfolio manager at US asset manager Columbia, and is awaiting FSA approval for sale in the UK.

The fund will use a screening method developed by Pope and co-manager Harvey Liu to invest in large-cap US stocks which are in the bottom third of their 52-week price range.

 “This fund is all about pessimism. We are looking for companies that have fallen out of favour due to undue pessimism about their future,” said Pope.

“In the current market, many stocks are trading within the bottom third of their 52-week price range, so I have a very large universe in which to invest and we are uncovering some very good opportunities.”

The existing portfolio’s top ten holdings, as of 30 June, include J.P. Morgan, Exxon Mobil, Microsoft, Apple and American Express, with IT and industrials two of the largest relative sector bets.

The fund has returned 10.1% over the past three years versus an 8.7% rise in the S&P 500, according to Morningstar.

Columbia which, like Threadneedle is a subsidiary of US firm Ameriprise Financial, already acts as the investment sub-advisor on three other Threadneedle funds: Global Technology, Global Energy Equities and $ High Income Bond.

Threadneedle’s existing range of US equity offerings includes the onshore £1.5bn American fund, managed by head of US equities Cormac Weldon.