China and U.S. Seen as Growth Engines

The two big economies that are going to drive the global economy in the next few years are China and the U.S. So says Daniel C. Chung, president and chief investment officer of Fred Alger Management, who, along with Zachary Karabell, Fred Alger's senior economic analyst, run the China-U.S. Growth Fund. They see growth stocks as the place to be in the market.

The fund was launched last January to invest in a basket of companies all over the world that stand to benefit from the Chinese economy's dynamic growth, which they estimate at 7% to 9% a year. The fund's top holding is Microsoft (MSFT ). Chung and Karabell also project above-average earnings growth for companies such as Yum Brands (YUM ), whose casual style of dining is taking off in China, and Wynn Resorts (WYNN ), which is about to open a casino in Macao.Holdings of the fund are roughly 50% U.S. and 50% Asian -- from China, Hong Kong, Japan, and Korea. The Asian stocks are managed out of Hong Kong by JF International Management, a subsidiary of J.P. Morgan Chase (JPM ).

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