JPMorgan American Investment Trust marginally underperformed the sterling total return on the S&P 500 index in 2009.

The index's total return was 26% but adjusted for sterling the improvement was 12.2%. The investment trust's total return was 11.6%.

The net asset value per share improved from 687.4p to 752.4p.

JPMorgan American IT is fully invested at the moment.

The large cap investments failed to keep up with the improvement in the market because of the defensive nature of the portfolio earlier in the year. The large cap company portfolio is now overweight in technology, oils and financials and underweight in consumer sectors and other energy. The small cap portfolio performed strongly.

The investment manager believes that "the US economy will grow at a slightly above-trend rate in 2010, just enough to nudge the unemployment rate a bit lower".

"S&P 500 operating earnings per share are expected to rise by 25% or more this year, as sustained cost containment and moderate economic growth allow firms to benefit from both revenue gains and higher profit margins. In addition, US equities still look attractive on a free cash flow valuation basis, especially given today's low borrowing costs."

The investment manager adds that the "vigour of the 2009 rally is unlikely to be maintained".

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