On Saturday 4 July 2026, the United States celebrates its 250th anniversary of independence. Uncle Sam’s ‘Semiquincentennial’ will see a massive celebration across this vast country. The headline event is the ‘Great American State Fair’ on the National Mall in Washington DC.
UK-based investors can play their own small role in celebrating America’s stunning success by putting money to work in the world’s largest economy. The US has long been recognized as a global leader in entrepreneurship, innovation, and business creation.
With a culture that encourages risk-taking, the US is home to many of the world’s most powerful and innovative companies. These range from chips champion Nvidia (NASDAQ:NVDA) and iPhone maker Apple (NASDAQ:AAPL) to Elon Musk’s SpaceX (NASDAQ:SPCX).
The latter is one of the world’s most exciting growth stories, combining dominant positions in launch services, satellite communications and AI infrastructure.
With a nominal GDP north of $32 trillion, the US is home to two of planet Earth’s top three stock exchanges ranked by market capitalisation; the New York Stock Exchange and NASDAQ. And because investors want exposure to world-leading corporations and a thriving stock market, they are understandably drawn to US equity funds.
Too big to ignore
But there are no guarantees in investing, and the US market is not immune to shocks. The US stock market still experiences ups and downs and any slumps can affect US equity funds. It should also be noted that the S&P 500, the gold standard for US equities, is currently testing new all-time highs. That means valuations for some constituents are stretched and their upside could be limited.
But the US market is simply too big to ignore. And keep in mind, Wall Street analysts are still forecasting double-digit growth in S&P 500 earnings for 2026 and 2027.
Our fabulous five
In this article, we highlight five US-focused funds we think should appeal to investors keen to allocate some capital to the ‘Land of the Free’.
Each portfolio pursues a different approach to generating superior returns from the US stock market over time.
BlackRock American Income Trust
One investment trust offering a unique way to access US value equities is BlackRock American Income (LON:BRAI). The fund aims to deliver risk-controlled consistent returns by using a systematic investment approach combining the power of big data, artificial intelligence and human expertise.
BlackRock American Income offers diversification away from US growth strategies. And the fund should benefit from any prolonged rotation of the US market towards value. Managers Travis Cooke and Muzo Kayacan aim to deliver annual outperformance of 1% to 2% relative to the Russell 1000 Value Index benchmark.
Since pivoting to its new strategy, the trust has won fans and delivered strong performance. It is the best one-year share price total return performer in the AIC North America sector with a 48.3% gain. For the month ended May 2026, the trust delivered a NAV return of 4.1%, marginally outperforming the Russell 1000 Value Index’s 3.8% gain.
Strong demand for strategy combined with robust performance means the trust now trades at a 0.5% premium. This means there is no short-term ‘discount opportunity’ on offer here. But patient portfolio builders should buy for long-term growth in NAV and the dividend. Under an enhanced dividend policy, BlackRock American Income pays a quarterly dividend equivalent to 1.5% of NAV. The trust also offers the sector’s biggest yield at 4.3%.
| Share price: 271p | Total assets: £161.2 million |
| Premium to NAV: 0.5% | Dividend yield: 4.3% |
Source: The AIC
JPM US Equity Income Fund (B3FJQ48)
Income investors seeking a differentiated approach might consider JPM US Equity Income Fund (B3FJQ48). Managers David Silberman and Andrew Brandon pursue a quality-based approach to investing in the world’s biggest stock market. They also benefit from JPMorgan’s well-resourced analytical team.
The bottom-up stock pickers target quality businesses that are ‘on sale’. By quality, they mean companies with durable business models, consistent earnings, strong cash flows and experienced management teams. They use valuation metrics such as the price-to-earnings ratio and free cash flow yield to unearth compelling opportunities.
The £2.7 billion fund targets a dividend yield above the benchmark over a market cycle. Though JPM US Equity Income has trailed the high-flying S&P 500 benchmark over five and 10 years, it has protected the downside. We think the fund should shine if quality, dividends and value find favour with investors again.
Top 10 positions span the likes of Google-owner Alphabet (NASDAQ:GOOG) and investment bank Morgan Stanley (NYSE:MS). Other top holdings are electrical and power management solutions play Eaton (NYSE:ETN) and tobacco titan Philip Morris (NYSE:PM).
| Price: 584.6p | Size: £2.7 billion |
| Dividend yield: 1.7% | Ongoing charge: 0.63% |
Source: Trustnet
iShares Core S&P 500 ETF USD Acc GBP
Those seeking a liquid, low-cost vehicle for exposure to America’s largest companies should consider iShares Core S&P 500 ETF USD Acc GBP (LON:CSPX). This exchange-traded fund (ETF) brings you access to the index that is one of the best gauges of the US stock market and the American economy.
Carrying a lowly total expense ratio of 0.07%, the ETF owns US corporate star turns ranging from Nvidia and Amazon (NASDAQ:AMZN) to Meta Platforms (NASDAQ:META) and high-flying Micron Technology (NASDAQ:MU).
The ETF uses full ‘physical’ replication to track the index, buying and holding all of the underlying names in the S&P 500. It is also an ‘accumulating’ ETF, which means the dividends from the underlying holdings are reinvested.
Investors should note the ETF won’t include SpaceX (NASDAQ:SPCX), the biggest initial public offering (IPO) in history, until at least June 2027. This is because the S&P 500 index committee has decided not to shorten its standard 12-month period before adding newly public companies. It could be longer than a year before S&P 500 ETF investors get exposure to Elon Musk’s (currently) loss-making rockets firm because the index committee has maintained its ‘profitability test’ for stocks.
| Price: $798.7 | Launch date: 18 May 2010 |
| Methodology: Physical replication | Ongoing charge: 0.07% |
Schroder US Mid Cap Fund
Managed from New York by Robert Kaynor and Joanna Wald, Schroder US Mid Cap (B7LDLV4) is focused on small and medium-sized companies. This £810 million vehicle has a diversified set of return drivers, which dampens down the risk of the overall portfolio.
Schroder US Mid Cap’s investment process is driven by in-depth company analysis, which has led to superior stock selection over time. In order to diversify the portfolio, the fund has three sources of stock returns. These include ‘steady eddies’ or less cyclically-sensitive stocks provide some ballast. In the ‘mispriced growth’ camp sit stocks where the managers believe the market has not fully understood the earnings potential. Finally, the smallest bucket contains ‘recovery-type’ situations.
Research firm FundCalibre is a fan. It says: ‘In a market as difficult to beat as the US, we like that good stock-picking, as opposed to sector allocation, has formed the foundation of this fund’s success. Schroder US Mid Cap is set up quite cautiously, with a three-bucket approach, and consequently tends to hold up well in tough markets.’
Top holdings include American food service provider Aramark (NYSE:ARMK) and network testing equipment play Viavi Solutions (NASDAQ:VIAV). The fund also has positions in life science products firm Repligen (NASDAQ:RGEN) and aircraft controls-to-components maker Moog (NYSE:MOG.A).
| Price: 255p | Size: £810.1 million |
| Dividend yield: n/a | Ongoing charge: 0.91% |
Baillie Gifford US Growth Trust
Investors willing to accept higher risk for more exciting growth potential might consider Baillie Gifford US Growth Trust (LON:USA) for portfolio inclusion. Managed by Gary Robinson and Kirsty Gibson, the FTSE 250 trust aims to provide exposure to the most exciting growth companies in the US across public and private markets.
Robinson and Gibson want to own these exceptional growth businesses for long enough that ‘the advantages of their business models and cultural strengths become the dominant drivers of their valuations’. USA’s publicly-listed holdings include Nvidia and Amazon, but the trust can also invest up to 50% of its NAV in private companies.
This enables USA to capture the growth of the many exciting US growth companies that are staying private for longer. As of 31 May, USA’s top holding was SpaceX at 13.2% of total assets. That was before the revolutionary rocket company’s blockbuster IPO that will have put the boosters under USA’s NAV.
USA also has holdings in exciting private companies including Stripe, Anthropic and Databricks, which investors couldn’t get access to by buying an S&P tracker. A revival in USA’s fortunes in recent years has brought the NAV discount in dramatically to 8%. Yet there is still value on offer here, since the trust traded at a premium until late 2021, when interest rates were lower.
| Share price: 325p | Total assets: £1 billion |
| Discount to NAV: 8% | Dividend yield: N/A |
Source: The AIC
