Many of the companies bought by successful European managers over the past five years have international earnings streams that have allowed them to maintain profitability in spite of tough conditions in their "home" markets.
With European companies well out of favour at the moment, investors brave enough to break away from the herd will be able to get access to global growth on a discount.
MacKinnon says that he holds certain European funds to benefit from this dynamic.
"We have recently added to Jupiter European," he said. "Why? It’s purely down to the fact that because it has European in its name, people do not buy it, although in reality it’s a perfectly good global fund but marketed as European."
MacKinnon says that many of the companies that are popular in the IMA Europe ex UK sector are global rather than European.
"Nestle is not a Swiss company, Unilever is not Dutch, Novo Nordisk is really a US company – based on sales," he said.
FE Alpha Manager Alexander Darwall’s £2.1bn Jupiter European fund is a top-decile performer over three, five and 10 years.
Over the past five years it has returned 63.86 per cent while the FTSE World Europe ex UK benchmark has made just 13.59 per cent, according to data from FE Analytics.
Performance of fund vs sector and benchmark over 5yrs
Source: FE Analytics
Darwall is a value investor, meaning that he looks for companies that are undervalued by the market, and with stock valuations depressed by concerns over the euro, this is a style of management that has done well in recent years.
His top-10 holdings include pharmaceutical companies such as Novo Nordisk and Novozymes, along with high-tech companies such as Syngenta – which works in agri-business – and Dassault Systemes, a French aviation specialist.
Novo Nordisk is a Danish pharmaceutical company that specialises in drugs for diabetes. MacKinnon says that this is a great area to be in given the obesity epidemic in the West.
"Diabetics used to die, but they don’t any more. They live for a long time and consume drugs," he said.
Although he says that valuations have been low in some parts of the market over recent years, MacKinnon recognises that some of the global blue chips that are popular in the sector, such as Nestle, are now expensive.
Nestle is held by 32.47 per cent of funds in the IMA Europe ex UK sector, according to data from FE Analytics.
However, MacKinnon says that even if these companies are bought when the market is high, over the longer term they are the best bet for inflation-busting returns.
"I don’t know if Nestle is worth 20x earnings, but I think they will continue to sell goods and services for a long period of time."
"We have owned it for about three years and we expect to own it for a long time."
Jupiter European is not the only European fund MacKinnon uses to play this global theme, he explains.
"We also own Thorsten Winkelmann’s Allianz Continental European, which is a small, concentrated portfolio of around 20 to 30 names, benchmark indifferent, trying to buy very high-quality companies with repeatable earnings that are able to grow their dividend, which is very important over time," he said.
The five crown-rated fund, which is run by FE Alpha Managers Winkelmann and Matthias Born, has had an exceptional last two years, making 22.72 per cent while its FTSE Eurofirst ex UK index benchmark has made 9.26 per cent.
Performance of fund vs index and sector over 2yrs
Source: FE Analytics
SAP is the fund’s biggest holding, making up 6.4 per cent of AUM, and the managers also have a 4.6 per cent position in Carslberg.
Inditex, owner of the Zara brand, and L’Oreal, also make an appearance in the fund’s top holdings.
Rob Morgan, investment analyst at Charles Stanley Direct, says that the tactic of investing in global companies through Europe has worked well over the past few years.
"Europe has been a good place for stockpickers because you can find luxury brands and industrial and engineering companies which have done well out of exports overseas," he said.
"They have done better than more domestic stocks such as telecoms, utilities and – until recently – banks."