Fund Spotlight: why this US active fund stands out

Achieving consistent outperformance in the US equity market has been a challenge for active managers in recent years, with returns heavily concentrated in a handful of mega-cap names. Simply holding the index has often been the winning strategy.

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Since the lows of April, US indices have recovered their poise. However, the outlook remains uncertain, with economic signals mixed. While investor sentiment is buoyant heading into the final quarter, the market has lagged other developed regions.

The Federal Reserve is widely expected to cut rates next week, generally considered to be a supportive move for growth companies coming as the labour market shows signs of cooling.

Adding to the complexity, value stocks have outperformed growth this year, a sharp reversal of the trend that dominated much of the past decade, leaving no clear consensus on which style will lead from here.

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Investors seeking a core US allocation without a strong style bias might want to consider the Jupiter Merian North American Equity I GBP Acc fund.This isa proven quantitative strategy seeking to achieve long-term capital growth for investors. Instead of choosing between growth or value, the portfolio adjusts in real time to market changes. This helps it avoid sharp underperformance when investors suddenly switch from one style to the other - a key advantage in today’s uncertain environment.

The fund is headed by Amadeo Alentorn, who boasts almost two decades of experience in the systematic equity space and was instrumental in the design and enhancements of the group's proprietary models over the years. He is supported by five additional managers with a similar seniority and intimate knowledge of quantitative investment research and modelling.

What does the fund invest in?

Jupiter Merian North American Equity fund takes a systematic approach to investing in US equities. At its core is a quantitative process designed to adapt dynamically to changing market conditions, allowing the fund to capture opportunities across styles and sectors. Its investable universe consists of around 3,000 North American companies across the market cap spectrum.  This broad opportunity set provides the foundation for a well-diversified portfolio.

Within the proprietary model, each stock is scored against five key pillars that the team believes determine whether a stock will make a good investment. The model considers momentum trends and short-term signals, as well as flexibly shifting between value and quality to reflect the changing market dynamics. The model also looks for sustainable growth, in order to distinguish those firms with consistent, long-term earnings growth from those whose growth is more erratic. In addition, it factors in analyst sentiment and company management, with a focus on those that use their capital effectively.

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The resulting portfolio typically holds around 200 stocks at any one time (currently 186), ensuring diversification while maintaining conviction in selected names. Position sizes are determined by the strength of each stock’s output within the model, subject to risk controls. The fund keeps a close eye on its benchmark, permitting a 5% sector deviation limit and 1% single-stock deviation limit relative to the MSCI North America Index. The target for tracking error, a measure of the volatility of the portfolio’s returns relative to the benchmark’s performance is 3-4%.

Currently, with the exception of the large allocation to technology (33%), the portfolio shows a broad balance across sectors, reflecting the fund’s principle of style diversification. This is likely to adapt as leadership in the US equity market evolves.

How has the fund performed?

Over the past decade, the Jupiter Merian North American Equity fund has returned investors 15.1% annualised, falling just short of the MSCI North America index return of 15.2%. However, the fund has been in the top quartile of performers in its Morningstar peer group over five and 10 years. The fund has also proven its ability to perform well during several challenging periods for active managers.

The fund has outperformed its MSCI North America benchmark over the past year as well as Morningstar peers, driven by the systematic model’s ability to identify undervalued opportunities beyond popular growth names.

Source: Morningstar Total Returns (GBP) to 31/08/2025. Past performance is not a guide to future performance.

Why do we recommend this fund?

The US equity market continues to present a broad opportunity set. From those companies that benefit mainly from America’s strong domestic economy to global players with significant international reach.

The Jupiter Merian North American Equity fund, a core US equity option on ii’s Super 60 list of investment ideas, offers investors a way to capitalise on this with potential for outperformance through its systematic approach. The fund benefits from a solid management team and a well-designed quantitative investment process.

What sets this fund apart is its flexibility. Instead of sticking to fixed investment styles, the model adjusts to focus on the factors most likely to do well in today’s market. This adaptability helps protect investors from being caught out when market trends suddenly shift.

The fund is available with a yearly ongoing charge of 0.95%.

Please find the latest factsheet here.