Schroders, the London-listed investment management firm, has become more optimistic in its outlook for the US economy, and is particularly well disposed towards small and mid-cap stocks.

The firm is positive because of the continued large pool of stimulus money still left to be spent next year and preliminary gross domestic product data showing that the world’s largest economy expanded by 3.5 per cent in the third quarter.

“The American economy is very deep and more importantly, it is very adaptive, Fred Schaefer, Schroders’ client portfolio manager, said in a briefing to journalists last Friday. He was giving a review of the firm’s US Smaller Companies Fund and US Mid Cap Fund.

Both funds have delivered stronger returns than the broader market since the start of this year: the US Smaller Companies has delivered total returns of 17.9 per cent as of the end of September, compared with the Russell 2000 index of stocks, while the US Mid Cap fund has delivered returns of 17.1 per cent, beating the Russell 2500 Index, up 16.4 per cent, over the comparable period. The small cap fund holds about £480 million of assets, while its mid-cap cousin holds about £273 million, according to published data.

The main conclusion of the investment firm is that the recovery to the US economy has “haltingly begun”.

Schroders, like its peers, is looking ahead at which economies and sectors are most likely to deliver strong investment returns next year, following the rebound to most stock markets since early in the spring of this year. A number of wealth management strategists are positive towards the US economy because they expect the country, having been the first major economy to enter recession, will be the first to emerge from it, in part due to the massive fiscal and monetary stimulus.

Mr Schaefer also rejected concerns about inflation in the upcoming months, noting the relative stability of commodity prices and a current lack of wage pressure in the US.

Some economists have voiced fears that the sheer volume of money injected into the financial system by central banks will trigger future inflation, as has sometimes happened in the past.

“We do not buy the inflation argument,” Mr Schaefer said.

Also, Mr Schaefer spoke on the current rate of unemployment in the US, which reached 10.2 per cent, higher than the predicted 10 per cent. The company does not expect this situation to change until the second quarter of 2010, but as Mr Schaefer pointed out, this is usually one of the last things to recover from a recession.

The company expects, in particular, small and medium health care and IT companies to outperform the broader market in the coming year. In the health care sector, for example, demand for greater value for money will work to the benefit of smaller, nimbler businesses. Large companies, which are seeking to cut costs or manage problems with new technology will also benefit small IT businesses.