Income stars back US consumer despite softer spending

Fund managers in the US equity income space are favouring stocks in the consumer sector despite slower consumer spending seen in the past month.

Clare Hart, manager of the £420m JPM US Equity Income fund, and Rebecca Young, running the £3.3m Neptune US Income fund, have been adding to or are overweight consumer sectors due to the dividends available and "oversold" shares. However, US consumer spending barely rose in October, despite an increase in disposable incomes. The US Department of Commerce said consumer spending was up just 0.1%, lower than the 0.4% forecast. Hart said: "Within the US Equity Income portfolio, we have been adding to the consumer space, which seems counterintuitive given the stresses on the consumer, but ...