The US equity market has been experiencing a long-term bull run. One result has been a significant move into index-tracking funds.

It is important to evaluate the US fund groups as managers of domestic and international equities. This analysis takes a deliberately skewed look at the markets, from the perspective of the US market, which is dominated by funds which invest in domestic equities and/or bonds.

The results are quite start-ling. US domestic funds are the top performers in general US equity and in health and technology, but the top-performing US smaller caps equity fund is a UK unit trust. Although this may have been boosted slightly in dollar terms by sterling’s appreciation, the average of the 22 European and offshore funds specialising in US small companies is also above that of the US funds. Similarly, US general equity funds based outside the US also perform better than the average US fund. Only in health and technology does the US dominate.

US-based global funds overall outperform their non-US counterparts, but it must also be remembered that they tend to hold higher levels of US shares than many non-US funds. Yet the top performer in this comparison is French-domiciled Agressor. In emerging markets, the leader is City of London Emerging Markets, managed by Barry Olliff. Here again, though, the small universe of US mutual funds provides better overall performance.

Overall, it seems non-US based funds offer slightly better performance, although there are wide disparities. US funds concentrate on US securities, but this does not mean they necessarily achieve superior results.

David Masters is with Micropal in Boston