According to the latest data from Skandia, the final quarter of 2011 saw a slump in sales of European funds, down nearly 25 per cent for the period.
Cockerill says that while he can understand investors’ aversion to the region due to the threat of debt contagion, he warned that selling out of any European-focused funds now will crystalise losses and mean investors risk being left behind once certainty is restored.
"The figures show a classic reaction to bad news," he said. "Politicians are driving sentiment at the moment and people are looking for safety first but that is absolutely the last thing they should be doing."
Cockerill believes the eurozone turmoil is creating compelling opportunities to buy closed-ended funds at attractive prices.
He says that savvy investors should use the opportunity to make the most of widening discounts in the investment trust universe.
"The Jupiter European Opportunities Trust run by Alexander Darwall is on an 11 per cent discount right now and not so long ago it was at around 3 per cent," he explained. "We can see the discount widening on what is arguably the best fund in that sector. Darwall is a great manager and invests with a large cap focus. When things turn around it’ll probably perform quite strongly."
"Once market confidence is finally restored it’ll take a while for the message to filter through to private investors and all the while the share prices of European funds are likely to rise. The best time to buy funds is after the market has taken a hammering."
Data from FE Analytics shows that the £188m Jupiter European Opportunities Trust has returned 94.33 per cent over the last three years and 24.98 per cent over the last five years. That is more than any other investment trust in the sector.
Performance of investment trust vs sector over 3-yrs
Source: FE Analytics
For investors with more tolerance for risk, Cockerill recommends the £231m Baring Emerging Europe Trust.
"If you want to take things a little further and gear up, the Baring trust is trading on an 8 per cent discount," he explained. "With a focus on eastern Europe, a region offering growth prospects, the trust could jump up further than the mainstream European funds."
An FE Trustnet study earlier this week revealed some bargain trusts that may be worth a punt for investors.
Skandia’s investment expert Graham Bentley commented: "In times of stock market uncertainty it is crucial that investors are in well-balanced portfolios that match their attitude to risk over the long-term. This should give them the confidence to ride out short-term volatility."