FE Trustnet previously reported that managers have been moving back into Europe in recent months as worries about a eurozone collapse recede and valuations continue to look cheap. Many have said that they find the best opportunities in blue chip stocks with a global market, but Wright (pictured) says the better route is through eastern Europe, on both a short- and medium-term horizon.
"When we looked at putting a bit more risk on after Draghi outlined his plans for the OMT we felt that it favoured that part of the world," he said.
"Those emerging or frontier markets get held back when risk appetite is waning, so we think they were hit harder than other markets and would benefit with risk back on the table. Valuations in eastern Europe are particularly attractive."
"But we also like the medium- to long-term story anyway. It’s a very powerful growth story that is not too dependent on the world economy."
"Poland, for example, did not even have an economic contraction in 2008 and 2009 because it’s a domestic story."
"The problem with buying into blue chip companies is that you have to pay a premium to buy into those stocks, but in eastern Europe a lot of the companies are suppliers to those companies in the West."
The World Bank, European Investment Bank and European Bank for Reconstruction and Development have recently decided to pump $30bn into eastern Europe to promote economic growth.
Liesbeth Rubinstein, manager of the Invesco Perpetual Emerging European fund, said the plan will provide a significant boost to the region.
"Although the scheme has been designed to include countries in the Balkans and Baltics, based on previous experience we would expect Poland to be the biggest beneficiary, followed by the Czech Republic and Hungary," she commented.
Wright runs the CF Midas Balanced Growth portfolio with Simon Callow. Over the past month the managers bought a position in offshore Renaissance Emerging Europe Equity because of their views on Europe.
Although data from FE Analytics shows the fund has a disappointing track record since launch in December 2010, Wright trusts the manager and likes his willingness to avoid the obvious names in his chosen sectors and regions.
Performance of fund vs sector since December 2010
Source: FE Analytics
The managers also added to their position in BlackRock Continental European Income. Wright explained that the extra returns that income-investing offers are particularly useful in a low interest-rate environment.
Since July of last year Wright and Callow have been repositioning the CF Midas Balanced Growth fund in order to create what they consider to be a genuinely diversified multi-asset fund.
Performance of fund vs sector in 2012
Source: FE Analytics
Our data shows that in the year-to-date the fund has marginally outperformed its sector average, making 7.06 per cent.