All in all, 36 funds count the five crown-rated portfolio as a top 10 holding, including FE Alpha Manager Toby Ricketts' Margetts Venture Strategy and FE Alpha Manager Bill McQuaker’s Henderson Multi Manager Active.
However, the next most popular actively managed funds are Schroder European Alpha and Standard Life European Equity Income, both of which crop up in just nine fund’s top 10.
The research also highlighted the popularity of passive funds with managers, as European focused trackers from Blackrock, Vanguard and HSBC all feature high up the list.
Most popular funds
| Name | Number of funds that hold it |
|---|---|
| BlackRock - European Dynamic | 36 |
| BlackRock - CIF Continental European Equity Tracker | 22 |
| Vanguard - FTSE Developed Europe ex UK Equity Index | 12 |
| HSBC - European Index | 9 |
| Schroder - European Alpha Plus | 9 |
| Stan Life Inv - European Equity Income | 9 |
| BlackRock - Continental European | 8 |
| Henderson - European Growth | 7 |
| Henderson - European Special Situations | 7 |
| Jupiter - European Special Situations | 7 |
Source: FE Analytics
Hibbert has run the £1.6bn fund since early 2008 and has recently acquired a five year track record.
According to FE Analytics, Blackrock European Dynamic has been the second-best performing fund in the IMA Europe ex UK sector with returns of 73.01 per cent over that time.
Though the fund has a higher annualised volatility over the period, its returns eclipse those of its benchmark – the FTSE World Europe ex UK index.
Performance of fund versus sector and index over 5yrs
Source: FE Analytics
The only fund to have beaten Hibbert’s portfolio over that time is FF&P European All Cap Equity, which is a top 10 holding in five multi-asset portfolios.
Blackrock European Dynamic has a minimum investment of £500 and an ongoing charges fee (OCF) of 1.67 per cent.
Blackrock does seems to be the asset management choice for multi-managers. The five crown-rated Blackrock Continental European portfolio – which is run by Vincent Devlin – appears in eight fund’s top 10 holdings.
Meanwhile, the second most popular European fund with managers is the passively-managed Blackrock CIF Continental European Equity Tracker – which crops up in 22 funds’ top 10 holdings.
The third most popular fund is also a passive: the Vanguard FTSE Developed Europe ex UK Equity Index, which features in 12 fund of funds.
HSBC European Index also features on the list, as it is a top 10 holding in nine multi-manager portfolios.
Despite the popularity of European tracker funds with managers, Hargreaves Lansdown’s Richard Troue still prefers actively managed funds for his European exposure.
“Tracker funds do well in efficient stock markets, especially as in the more developed markets investors might find it harder to find active managers who add value,” he said.
“However, you have to accept that as they trade on an index, when markets go down then so will the fund, but active managers have the ability to hold more defensive positions so that they can protect on the downside.”
“I think people forget that Europe is very big and there are a huge amount of companies and therefore a lot of opportunities for managers.”
“We favour managers that can outperform in all market conditions and I personally wouldn’t just use a tracker in Europe, but there is a place for both actively and passively managed funds in a portfolio,” he added.
Two other portfolios that crop up in nine funds’ top 10 are Schroder UK Alpha Plus and Standard Life European UK Equity Income – both of which have the coveted five crown rating and are headed up by FE Alpha Managers.
Leon Howard-Spink has managed the £927m Schroder European Alpha Plus fund since 2005. The fund has been a top quartile performer in the IMA Europe ex UK sector over one, three and five years.
Will James has managed Standard Life European Equity Income since its launch in April 2009. The fund currently yields 3.75 per cent.
The fund has been top quartile over one year and with returns of 29.38 per cent over five years it has beaten Howard-Spink’s fund by 6.43 percentage points over a three year time frame.
Performance of funds versus sector and index over 3yrs
Source: FE Analytics
However, both funds have considerably outperformed the FTSE World Europe ex UK index over that time and each has had a much lower annualised volatility.
James’ fund requires a minimum investment of £500 and has an OCF of 1.61 per cent, while Schroder European Alpha Plus has an OCF of 1.68 per cent and a minimum investment of £1,000.
Both of the five crown-rated Henderson European Special Situations and Henderson European Growth funds crop up in seven fund of fund’s top 10 holdings. Both are run by FE Alpha Manager Richard Pease, with FE Alpha Manager Simon Rowe also co-managing the European Growth fund.
Cedric de Fonclare’s Jupiter European Special Situations fund is the last name to appear on the list; it too features in seven multi-manager portfolio’s top 10 holdings.
It is FE Alpha Manager Toby Ricketts’ ninth largest holding in his Margetts Select Strategy fund, making up 6.2 per cent of the £94m portfolio.