Just browsed the top 10 North American funds in FE Trustnet (by 1y, link) and they all jittery in the last 1y and have high volatility (risk between 110 and 140). True that they give good return (38%-42%), but their Sharpe is about 2-3. GAM NA Growth (FE, Morningstar) which I just sold is smoother than then top 10. Its risk is 93, 1y 29%.
Unicorn UK Smaller Co (link) is a better investment, with Sharpe of 5.9, risk of 71, 1y of 58.8%. It’s very smooth. Here’s a few other good ones from UK: Unicorn Free Spirit, Cazenove UK Smaller Co, IP UK Aggressive, Unicorn UK Income, ConBrio Sanford Deland UK Buffettology, CF Miton UK Multicap. Their return is about 40%, risk 50-110.
So I think I will be out of US market for the time being. US is still good in the long run, but it’s not as good as UK. Even Europe is generally better than US (in the sense that it gives better return for the same risk). US is good in the long run means that if we invest now, in 3 years time it will produce a good return. But it will be bumpy along the way. I will wait until it becomes smoother, probably March next year.
20th Nov 2013, note on US equity: Legg Mason Capital Management Opportunity had a stellar performance of 80% (71% in HL for A Acc). But the nasty 30% fall in July 2011 worries me. This indicates that when something goes wrong in the market, it would have a big fall. And the rebound was not quick. It got to Jan 2011 level in Jan 2013 (2 years period), whereas S&P fell 20% in July 2011 and got back to that level in Jan 2012 9only 6 months). There might have a change of policy or management in Nov 2012, because since then the performance was excellent: 70% in 1y versus S&P of 30%. The market fall in June 2013 and mid Sep was handled very well by this Legg Mason fund. Overall it is a good fund and worth considering. Whitechurch uses it.
The fund may invests in equity, bonds, derivatives, and not limited by industry, size or asset class. It’s in USD.