Falling oil prices and a rising sense of optimism about an upward trend in long-term growth have driven markets across Europe to five-year highs in recent weeks. But Hugh Cuthbert of the Edinburgh-based SVM Continental Europe Fund reckons markets could go still higher. "With Europe still seen as at an earlier stage of the economic cycle," he says in his monthly fund review, "the environment is positive for equities."
Cuthbert assumed management of the fund at the start of this year. During his tenure, it has achieved a 20.1% return against a European sector average of 17.3%. He tells What Investment that he always takes a "bottom-up" approach to picking stocks for the fund. With 1,000 brokers covering each large cap, Cuthbert believes it is easier to find "more interesting data" on small- and mid-cap stocks. In March of this year, however, the fund's focus "shifted from small-cap toward large-cap offerings because we saw that the markets had had a good run".
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