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Wise moves into Bill Miller fund in switch from Europe to US

Wise Investment has bought into Bill Miller’s US equity fund in a broader move in which it has swapped its entire European exposure with the US. 

The fee-based adviser, which has branches in Chipping Norton and Reading, has been gradually making the exchange since the summer after signs that US fiscal authorities were prepared to do all they could to prevent a deep recession in the world’s biggest economy.

Wise director David Stephenson said: ‘The US started to do things about its economy while the European and UK central banks closed their eyes to the problems. The Federal Reserve policy is designed to keep the economy going, but in Europe there has been too much focus on inflation.’ 

The appreciation of the US dollar was another motive behind the restructure, in which the Wise Active Growth fund of funds transferred its 20% exposure to Europe for an equal weighting in the US. ‘We thought the dollar was very undervalued and we appear to have been proved right on that account,’ Stephenson said.  

Miller’s Legg Mason American Value fund is one of four US funds Wise has bought to supplement this exposure. The other three funds are Tom Walker’s Martin Currie North American fundStephen Kelly’s AXA Framlington American Growth fund and the Schroder US Mid & Small cap fund which is run by Citywire A-rated Jenny Jones

The move into Miller’s fund is the most interesting. After outperforming the S&P 500 for 15 consecutive years, Miller came unstuck in the downturn in the US, which put his value investment style under pressure. This resulted in him underperforming the benchmark in the past 30 months. 

‘Value investing went out of favour, which is why he heavily underperformed,’ said Stephenson. ‘But a good fund manager does not become a bad fund manager overnight. We think value is back and can see lots value in the US at the moment.’

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