As the campaigning and mudslinging gather pace ahead of November's US presidential election, the American economy can be expected to play a huge role in a bruising contest. But the wider world will also have concerns about the financial struggles of the States. For example, the average growth of British equity funds investing in the US during the past year stands at just 7.77 per cent, says the Standard & Poor's ratings agency. Compare this to the 35.3 per cent average growth of funds investing in Japan or 25.6 per cent in the UK.

As the campaigning and mudslinging gather pace ahead of November's US presidential election, the American economy can be expected to play a huge role in a bruising contest. But the wider world will also have concerns about the financial struggles of the States. For example, the average growth of British equity funds investing in the US during the past year stands at just 7.77 per cent, says the Standard & Poor's ratings agency. Compare this to the 35.3 per cent average growth of funds investing in Japan or 25.6 per cent in the UK.

Some individual managers have beaten the average, of course, but, with these figures, you may want to avoid the US.

Yet history suggests this is the time to invest: the S&P 500 index of big American companies has risen in four of the past five US election years. It went up by 4.79 per cent in 1984 (Ronald Reagan), 16.6 per cent in 1988 (George Bush Snr), 7.62 per cent in 1992 (Bill Clinton), and 22.96 per cent in 1996 (Mr Clinton again). The exception was the 9.1 per cent fall in 2000 (George Bush Jnr).

"There is some foundation to investing in an election year," says Rob Burdett, the manager of the Credit Suisse North America multi-manager fund. "Governments do tend to spend to buy votes and get the economy in better shape." As the extra money boosts companies and consumer spending, "it makes sense to invest in the majority of election years for these positive returns," he says.

Regardless of pre-election sentiment, the world's only superpower is suffering from a number of economic ills. Consumer confidence has waned, unemployment figures are high and a weak dollar has hit investment returns in US companies. The shadow of terrorist threats could prove destabilising too, Mr Burdett adds.

But US company profits have been beating expectations, says Mike Lenhoff, a strategist at stockbroker Brewin Dolphin. "I expect markets will move ahead for most of the year until the Federal Reserve changes its mind and raises interest rates. That's when a rebound might really falter."

Despite its recent mediocre performance, America's role as an engine for global growth gives it a place in many investors' portfolios. You can buy a slice of the US via a unit trust, an equity individual savings account (ISA) or even shares.

Anna Bowes, a senior investment manager at independent financial adviser (IFA) Chase de Vere, says: "You definitely shouldn't ignore America: it still has an enormous impact on the world's economy. The UK will generally be lower risk but the US has a lot to offer for stock- picking funds in particular."

If you are still looking to use up your ISA allowance for this tax year ahead of tomorrow's deadline, or plan to invest in the new tax year, Ms Bowes recommends Investec American, Fidelity American or Gartmore Govett US Opportunities.

Tim Cockerill, an adviser at portfolio manager Principal, suggests you seek a fund whose manager aims to put in a steady performance rather than "shoot the lights out".

"We feel that the S&P 500 is hard for managers to beat so instead we look for consistency. The US offers real opportunities for the longer term. You cannot have a growth portfolio without some exposure."

However, he also warns of the currency risk. When you buy an American fund, its manager turns your money into dollars to buy shares in companies. If the share price were to stay the same but the currency to weaken, the value of that company holding would fall because it would cost more dollars to make up your original investment.

If, instead, you are prepared to buy shares directly in US companies, be prepared for the cost of stamp duty, commission and a charge for overseas trade, as well as higher risk.