Given the current turmoil, you may want to avoid Europe, but it's just "too large to ignore", writes Ben Yearley in Money Marketing. The region represents around 15% of world stockmarket capitalisation and is "good value" on a p/e of 11 ("well below its historical average"). One fund manager taking advantage is Richard Pease, of the £355.93m Henderson European Special Situations Fund.
The fund invests in European (excluding UK) equities, and has returned a cumulative 16.8% over two years against the sector's 6.5%. While the management of European firms often strike a "despondent tone [the mood] is brighter among those companies that create products or services that are less economically sensitive", says Pease in FT Adviser.
"In these uncertain times, the case for investing in high-quality structural growth stories has never been stronger, particularly if you can find good examples at attractive prices."
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Pease looks for firms with high exposure to global growth and strong recurring sales. He favours well-funded "family businesses" that are not vying for investors' attention companies that "don't really need him", he tells Money Marketing.
The fund favours the more robust northern eurozone members the Netherlands accounts for 19.8% of the portfolio, Switzerland 18.8%, Germany 16% and France 11.2%. "Once [Pease] has identified such a company, he usually sticks with it, believing that buying a good business negates the effect of bad timing over the long term," says Yearley. This is one fund that won't have much "chopping and changing".
Contact: 0845-608 8703.
Henderson European Special Situationstop ten holdings
| Symrise | 4.4 |
| Wolters Kluwer | 4.3 |
| Givaudan | 3.6 |
| Reed Elsevier | 3.5 |
| Fuchs Petrolub | 3.5 |
| Zurich Financial Services | 3.5 |
| Royal Unibrew | 2.8 |
| Sika | 2.7 |
| Novartis | 2.6 |
| DCC | 2.6 |
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