Top US manager: Don't overlook mid-cap tech companies for Apple

John Eisinger, manager of the top- performing £507m Janus US All Cap Growth fund, has upped his weighting to mid-cap technology companies but is avoiding some of the sector's giants.

Eisinger said recent US stock market volatility has pushed down the share prices of technology companies and made valuations particularly attractive.

As a result, he has gradually reallocated 5% of his healthcare weighting into technology, reversing his overweight position in healthcare from last year.

"During 2010 healthcare lagged the rest of the market because it was weighed down by concerns over reform. The sector underperformed, presenting some of the best opportunities versus other sectors," said Eisinger.

"Technology is different as it has been going up of late because of the high level of recent volatility, which has driven prices down substantially."

Eisinger has avoided mega-cap names, such as Apple and Microsoft, because he sees better opportunities elsewhere. He owns microcontroller manufacturer Amtel and semiconductor manufacturer ON Semiconductor, for example.

"There are better risk reward opportunities in mid-cap and the upper mid-cap spectrum," he said.

The manager holds one US bank - Morgan Stanley - which he sees as mis-priced because its long term value is substantially greater than its current share price.

He is also finding value in US financials and would not rule out upping his 8.3% exposure to the sector in the future.

However, Eisinger has no exposure to consumer staples due a lack of opportunities.

"Consumer staples are a favourite of fund managers in times like we see today because they are defensive and stable. Everyone sells cyclicals and buys staples. We tend to go against the grain a bit more," he added.

He said the largest headwind impacting the US economy remains the eurozone crisis.

"Not much will happen in the US in 2012 because it is an election year, but the real driver will be how deep of a recession will the eurozone go into and whether China will have a soft landing?" he said.

The Janus US All Cap Growth fund has returned over 100% over three years, against a 51% average, but has lost 10% over the past year compared to 0.7% for the peer group, according to Morningstar.