US- US value managers comprehensively outperformed their growth counterparts in the twelve months to last November according to the latest research from Standard & Poor’s.

Median funds for mainstream and small caps underperformed their index benchmarks but in both categories value managers outperformed growth managers.

Divergence in style returns is most extreme in the US small company sector- S&P’s small cap index fell 6.6% over the year to November but the median value fund rose 4.4%. This contrasts with an overall median fund decline of 27% and a fall for growth funds of 33%.

In compiling the research, S&P screened eighty eight funds, of which one small cap and three mainstream funds scored a AAA rating.

These included the Dresdner Global Distributor North American fund, Dresdner RCM’s North American fund, GAM’s Star American Focus fund and Deutsche’s Global American Micro-Cap fund.

Forty five received an AA rating and thirty three were awarded an A. Four funds are under review following recent changes to the investment team and two Henderson funds are unrated by S&P due to concerns about what it refers to as diminished management resources.

Fidelity’s American fund improved to an AA rating while five- two belonging to Baring, and one each to Robeco, Scudder and Scottish Mutual- dropped a rating band.

S&P says there is more optimism among fund managers and most feel there will be an improvement in the US economy this year. But the report suggests that opinions vary as to the potential recovery.

Peter Norton, head of the America team at S&P, says: “portfolios are generally moving into more economically sensitive stocks, especially among the more aggressive managers, who have cited the historic tendency of markets to anticipate market recovery by three to six months. On the other hand there remain some cautious managers waiting for some solid confirmation of the turnaround.”