"Obama’s budget is absolutely fascinating and I think people are underplaying it," he said.
“The US’s position as the only world superpower gave them the option of going for growth following the financial collapse, but now the deficit must be addressed."
"In late 2010 we tried to avoid sectors that could suffer from deficit reduction. We dropped all our defence and healthcare exposure, for instance, and positioned ourselves overweight industry and technology, with a moderate overweight in consumer discretionary."
Shard believes that Obama is likely to increase spending in a bid to strengthen his presidential legacy and to fight a re-election campaign. The manager's investment strategy is aimed at protecting investors from a shift in government focus.
"Obama inherited a poor economy and collapsing financial system. Now in his third year of the presidential cycle he will feel he hasn’t had a fair crack of the whip at spending and getting re-elected," he added.
Shard says the return of corporate confidence is also central to the success of the US market and helps to explain his investment strategy.
"The theme we have been seeing recently is increased confidence in the corporate sector," he said.
"The market seemed to have been set up for a global depression but over the last couple of quarters we are seeing corporations hiring and lots of deals being done."
Jonathan Armitage, who manages Schroder Global Alpha Plus, predicted the return of confidence and also moved capital into industry and technology.
"People were underestimating how successful the US recovery would be. We thought the economy was performing better than the consensus and our research indicated it would lift the industrial sector," he said.
Performance of funds vs sector since April 2010
Source: Financial Express Analytics
Schroder Global Alpha Plus, which has a 47 per cent weighting towards the US region, returned 10.4 per cent over three years, compared with Invesco Perpetual US Equity, which managed 3.2 per cent over the same period.
Armitage added: "Even we were surprised about how quickly the recovery came along. We maintained our position in tech stocks, particularly in energy, equipment, instruments, and those sorts of areas."
"Our weighting in tech remains strong, particularly in software where we see lots of pricing power."
Shard agrees that that position in the sector is likely to bring returns. "There were six or seven appointed winners in tech in 2010, particularly in areas aligned to the cloud-and-mobile market."
"Companies like salesforce.com did very well," he said. "My early cycle bet is that we will see some value in industry, energy and technology sectors."
"We are looking for stocks that can deliver sustainability in light of Obama’s budget, since the market impact of the deficit address may not be seen until next year."
The comments come as the US releases its latest inflation data.