Five funds for a European bull-run
FE Trustnet takes a look at a selection of top-rated portfolios that could be set for massive gains if we are indeed over the worst of the eurozone crisis.
Confidence in the will of the eurozone’s leaders to do whatever is necessary to keep the currency union together has been growing in recent weeks, leading a number of commentators to suggest that it’s time to think about investing in the continent.
Premier’s David Hambidge told FE Trustnet last week that it is time to get into European income-paying stocks before the rush starts
, while RWC’s Ajay Gambhir said yesterday that the continent’s markets were returning to normalcy
, with valuations driving movements rather than macro concerns.
Here are five top-rated funds in the sector that may appeal to those expecting a significant rebound:
FE Alpha Manager Alexander Darwall’s
portfolio is the standout fund in the sector, and unlike the funds of many star managers it is still open to new investors.
The lack of confidence in the European markets means Jupiter European hasn’t seen the mass inflows that other managers of his stature inspire, forcing them to soft-close their funds.
Five-crown rated Jupiter European has gained 212.85 per cent over a decade – the second best performance in the sector. It’s also a top quartile performer over a one, three, five and ten year period, as well as being consistently below average in terms of volatility.
Performance of fund versus sector and benchmark over 10yrs
Source: FE Analytics
The fund is a strong performer in both rising and falling markets, so is likely to be of particularly interest to those who are still worried by macro headwinds.
It is available with a minimum investment of just £500 and has a total expense ratio (TER) of 1.79 per cent.
BlackRock European Dynamic
FE Alpha Manager Alister Hibbert’s
fund is the only one to beat Darwall’s over ten years, returning 244.07 per cent to investors.
According to data from FE Analytics, the fund has added the most Alpha out of any in the sector over five years, meaning that the manager has added the most value to his benchmark.
Despite their similarly strong records, the managers have just three companies in common in their top ten holdings – Novo-Nordisk, Syngenta and Fresenius.
The fund has suffered slightly over the past year, losing 2.33 per cent; however, it has a better record than Darwall’s portfolio in up markets, outperforming it in 2005, 2006, 2009 and 2010. For this reason, it may be the preferred option for those who are especially bullish.
Another five-crown rated portfolio, it is also available with a minimum initial investment of £500, and has a TER of 1.67 per cent.
Allianz Continental European
This fund hasn’t performed quite so well over ten years, slipping into the second quartile for returns, although it is in the first quartile over three and five years, with returns of 32.37 and 13.17 per cent respectively.
Performance of fund versus sector and benchmark over 5yrs
Source: FE Analytics
It has seen management change hands a number of times over the years, and is now headed up by Matthias Born and Thorsten Winkelmann.
Unusually, the portfolio has a preference for French-domiciled companies compared to those in Germany. French stocks make up 29.5 per cent of its holdings rather than the 17 per cent in Germany.
With a minimum investment of £500, it has a TER is 1.76 per cent.
AXA Framlington European
Like Jupiter European and Blackrock European Dynamic, this fund is in the top quartile over every timeframe from ten years through to one month, and has five FE Crowns.
The manager, Mark Hargraves
, has run the portfolio since December 2000, giving him lots of experience of the sector.
A minimum investment of £1,000 is required to gain access and the TER is 1.59 per cent.
Threadneedle European Select
The fund’s returns of 49.18 per cent make it the second-best performer over three years after Jupiter European.
FE Alpha Manager David Dudding
has run the fund since 2008, and the portfolio has five FE Crowns.
Its five year annualised volatility of 19.47 per cent is the lowest out of all the funds considered here, and it also lost the least in 2008.
Threadneedle European Select has a minimum investment of £2,000, and a TER is 1.69 per cent.