Investment trust managers have a mixed and often cautious verdict on US equities as the country marks 250 years of independence, with most maintaining underweight positions despite acknowledging the market's structural strengths.
Ahead of the 250th anniversary of the Declaration of Independence on 4 July, the Association of Investment Companies (AIC) questioned global investment trust managers on their current stance on the world's biggest economy and stock market.
Annabel Brodie-Smith, communications director at the AIC, said: "From technology to finance, industrials and healthcare, the US is home to many of the businesses that have shaped the global economy over the past century."
That dominance took decades to build but it might be a challenge for this to be sustained indefinitely, according to trust managers.
Martin Connaghan, co-manager of Murray International Trust, noted that it took the US "roughly half its 250 years to move from independence to becoming the world's largest economy, overtaking the United Kingdom around the turn of the 20th century".
He attributed that rise to natural resources, industrialisation, a deep domestic market and stable institutions, reinforced after major conflicts by financial leadership and currency strength. The manager cited investment legend Warren Buffett, who said "never bet against America" in his 2020 letter to shareholders.
"The US continues to benefit from a large domestic market, global leadership in innovation and technology, and deep capital markets supported by strong institutions and the rule of law," he added.
Despite that, the three trusts polled by the AIC are running an underweight to US versus the 63.5% weighting in the MSCI AC World index.
Joe Dowling, fund manager of Invesco Global Equity Income Trust, said the portfolio has been underweight the US since he took over the strategy in 2020 and the gap has widened over time.
"This is not a top-down call. Our process is entirely bottom-up," he said. "Over the past few years, the US has increasingly dominated global benchmarks as a small number of very large companies have grown significantly. Our valuation-driven approach has naturally led us elsewhere. More recently, this has included areas such as healthcare and other out-of-favour sectors where valuations have become more compelling."
Samantha Fitzpatrick, co-manager of Murray International with Connaghan, said the trust holds about 37% in US-listed companies, the highest proportion in its history, but still well below the MSCI AC World's weighting.
"The key risk for Murray International of having a neutral or overweight position in US equities, or more specifically holding positions in its biggest constituents, is that doing so would greatly impact income generation within the trust and therefore make it very difficult to fulfil the investment objective as set by shareholders," she said.
She added that income opportunities within US equities have multiplied over the past decade, though position sizing still depends on income levels relative to other markets.
Dowling identified the AI capital expenditure boom as the main threat to US equities: "While the US index might appear diversified on the surface, large parts of it are driven by the AI capex boom. If this boom slows, that risks a significant headwind to both earnings and multiples."
He warned that "that combination can be extremely painful," extending the same concern to parts of emerging markets and Japan, and said portfolios should be diversified by their driver of return rather than by theme.
Connaghan pointed to a more complex domestic backdrop, arguing that despite rising political polarisation, slowing population growth increasingly reliant on immigration and an ageing demographic profile, the US still compares favourably with other developed markets. However, it has weaker “demographic momentum” than many emerging markets.
He also flagged moderating income-per-capita growth and government debt that has risen significantly relative to the country's own history. Together, he said, this points to "an economy with enduring structural strengths, but one that may face a more complex path ahead, with greater reliance on policy discipline, productivity gains and sustained investment to support long-term growth".
Other managers are finding value away from the AI infrastructure theme. Malcolm MacColl, manager of Monks Investment Trust, argued that investors have wrongly labelled some businesses as "AI losers".
Samsara, which helps utilities, logistics and construction companies manage physical assets, is one example. Its shares have fallen sharply despite what MacColl described as a strengthening position as it integrates AI into its offering.
MacColl also pointed to spending on electrification, reshoring, defence and energy infrastructure, which he said is creating bottlenecks benefiting companies tied to scarce physical assets, including Freeport-McMoRan, EQT and Tidewater, alongside Medpace, Medline and Ensign in healthcare, a sector he called "all but forgotten".
"The intensity of the market's focus on AI has cast a long shadow. We think that shadow is where much of the value now lies," he said.
Monks currently has 57.4% in North American equities.
Murray International has also added new US positions this year. Fitzpatrick said the trust initiated a stake in ONEOK, a midstream natural gas operator, in May 2026, funded by trimming its holding in global miner BHP. ONEOK carries a 5% dividend yield and the switch reduced the trust's direct commodity exposure after a strong run in mining shares.
The trust also bought into Union Pacific, which Fitzpatrick called "one of the highest quality rail operators in North America". She noted a potential combination with Norfolk Southern could offer further upside, though she views the rail operator as a sound holding on a standalone basis.
Connaghan questioned whether the US can keep expanding its share of global equity markets. He pointed to a widening gap between the country's market capitalisation and its share of the real global economy.
Passive investment flows, he warned, may be amplifying concentration in a small number of mega-cap stocks while weakening price discovery. He also warned about a 'K-shaped' economy, where strong corporate performance has diverged from softer consumer spending, alongside the US's continued reliance on foreign capital to support its equity market and fiscal position.
"History provides a cautionary parallel – Japan once represented an outsized share of global equity markets at its peak before experiencing a prolonged period of decline," Connaghan finished.
"Taken together, while there are compelling reasons for continued US leadership, the interaction between concentration, valuation, structural imbalances and the reinforcing effects of passive investing suggests that the current level of growth and scale of dominance may prove difficult to sustain indefinitely."