Investment companies are increasing their exposure in the US

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INVESTORS with holdings in the USA should be following the presidential elections closely, according to the Association of Investment Companies (AIC).

Its research shows that the country was expected to be one of the best-performing in 2012 and the average AIC member in the Global Growth sector has increased exposure in the US from 22 per cent at the end of last December to 26 per cent at the end of September.

The North America and North America Smaller Companies investment company sectors have also performed well in the year to September 30, up 19 per cent and 10 per cent respectively.

Meanwhile, Alliance Trust has increased its US holdings by 13 per cent since the end of last year, to 33 per cent at the end of September. Similarly, Edinburgh Worldwide has increased US exposure by eight per cent, and EP Global Opportunities and Mid Wynd International each by seven per cent.

Matthew Strachan, head of North American Equities at Alliance Trust, said: “We expect that the US Presidential election will be close, but that President Obama will be returned for a second term, however without a majority at Congressional level, which may hamper delivery of his programme.

“Domestically, we are seeing improved data coming out of the US, most notably in housing, with the latest unemployment figures also encouraging.

“This should help insulate the US from weakness elsewhere in the world, whilst the general resilience of US companies continues to encourage.”

During his first term, Obama’s healthcare reforms have benefited the biotechnology and healthcare sector. The outcome of the upcoming election is likely to affect their ongoing fortunes.

Daniel Mahony, manager at Polar Capital Global Healthcare Growth and Income, said: “If Obama is elected, expansion for healthcare coverage will continue as planned – a big boost for hospitals and for healthcare in general.

“If Romney is elected, then healthcare reform may be curtailed in some ways. Congress needs to get to grips with the fiscal deficit.”