3 Biggest and Best Europe Funds

Morningstar fund analyst Sam Meakin reveals the three largest funds in the Europe ex-UK sector, and the three best performing

Samuel Meakin 5 April, 2018 | 2:28PM

3 Largest European Equity Funds

The funds discussed below are amongst the largest in the Europe ex-UK sector and are all managed by experienced managers with consistent investment approaches.

BlackRock European Dynamic has a Morningstar Analyst Rating of Silver and is managed by Alister Hibbert. The approach aims to unearth companies with medium- to long-term earnings power that is significantly higher than the market and not factored into the share price. Top-down considerations come into play through team discussions on themes and sector trends that aim to prioritise the research. The portfolio is unconstrained, and the manager does not shy away from making large sector bets where he has strong conviction. The fund has a very strong track record over Hibbert’s tenure from 2008.

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Bronze Rated Threadneedle European Select has been managed by David Dudding since 2008. Dudding’s philosophy has stayed the same throughout his time managing money. He targets firms exhibiting pricing power and high barriers to entry. This leads to a concentrated portfolio of sturdy-growth companies, and the portfolio is constructed from the bottom up with latitude to deviate from the benchmark’s sector and country weightings. The fund has below-average volatility compared with peers thanks to the preference for established franchise companies with low levels of debt.

Fidelity European, which earns a Bronze Rating, is managed by Sam Morse. He favours a bottom-up investment approach, conducting his own stock analysis as well as making good use of the extensive European analyst resources at Fidelity. Dividend growth is key to this process, as Morse views dividends as an indicator of a company's ability to grow in a sustainable manner, and he looks to hold high-quality names over the medium to long term.

3 Best Performing European Equity Funds

The following funds are amongst the best performers in the Europe ex-UK sector over the last three years.

Gold Rated Jupiter European has been managed by Alexander Darwall since 2001, providing a high degree of stability for investors and a consistency of investment approach. There is a strong focus on getting in-depth understanding of how a company works and on maintaining regular contact directly with its management. The manager prefers firms with proven track records, clear business plans where management acts in the interest of shareholders, and above-average earnings growth prospects. He likes firms with differentiated products or services, a dominant market position and thereby superior pricing power.

Martin Skanberg, manager of the Schroder European fund which is Silver Rated, takes a measured approach to constructing his portfolio, and the process is predominantly bottom-up in nature. He is style-agnostic, assessing each investment opportunity in terms of an inflection-point thesis, with a focus on a company's growth, margins, and returns, implied market valuation, and share-price behaviour. That said, he is willing to tilt the portfolio to reflect the areas where he sees the most opportunities. The fund has a strong long-term track record under Skanberg.

FP CRUX European Special Situations, which carries a Morningstar Analyst Rating of Bronze, is managed by the highly experienced Richard Pease. Pease has managed the fund since its launch in 2009, shortly after he moved to Henderson.

He left Henderson in June 2015 to found Crux Asset Management, transferring over the assets of the fund with him at the same time. At Crux, his process has remained unchanged. He seeks businesses with sustainable returns, led by quality management with proven track records and a shareholder focus.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
BlackRock European Dynamic D Acc627.86 GBP-0.95
Fidelity European W Acc1,648.19 GBP-1.07
FP CRUX European Special Sit I Acc GBP280.75 GBP-1.56
Jupiter European2,391.98 GBP-1.01
Schroder European Z GBP Acc118.83 GBP-1.47
Threadneedle European Sel Z Acc GBP2.03 GBP-1.07
About Author

Samuel Meakin  is a fund analyst for Morningstar