What Have Fund Managers Been Buying?

We take a look at what Europe Value, Blend and Growth fund managers were adding to their portfolios in February 

Fernando Luque 30 March, 2021 | 9:39AM
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Europe managers

Last month we introduced a new series looking at what European fund managers have been buying. All our selected managers (remember there are three fund lists: Europe Large Value Equity funds, Europe Large Blend Equity funds and Europe Large Growth Equity funds) have updated their portfolios, either at the end of January or at the end of February, so we can analyse the changes that have taken place in the top 10 of their portfolios.

But before doing this analysis we have to mention some changes in our funds’ lists. As we said in our first article, these lists are not static. New funds can enter or leave in any monthly review.

This month we have added Invesco Pan European Structured Equity to the Large Blend fund list. Our analysts think “this is a very unique, quantitatively managed fund". An important enhancement to the fund was implemented in early 2021, separating the low volatility and factor exposure parts of its optimisation process. Analysts add: "We need time to assess its effectiveness and impact, we believe that the core part of this robust approach remains unchanged”. But as a consequence of this change, the portfolio's top 10 has undergone significant changes in the February portfolio compared to end January.

There are also funds that have suffered changes in their style box and so have moved from one list to another. TM Crux European Special Situations has shifted from Large Growth to Large Blend, while BGF European Value has moved from Large Value to Large Blend. We already have a Blackrock blend fund in the blend list, so we have not included it in this month's analysis. And finally, JOHCM Continental European has moved from Large Blend to Large Value.

Fund list

Now, let's look at the changes that have occurred in the portfolios of these funds.

Large Blend Equity Funds

large blend

The healthcare sector continues to dominate the top positions of the Large Blend fund portfolios, although it is the defensive consumer company Nestlé (3-star rating, Wide Moat) that is the most repeated stock in the Top 10. Nestlé, in fact, makes its first appearance in the Invesco Pan European Structured portfolio and does so in first position. In total, there are four pharmaceutical companies present in at least two portfolios: Novo Nordisk, Roche Holding, Novartis and Sanofi.

Among the new stocks in the top 10 of our selected funds, it is worth noting the presence of telecommunications companies, such as Vodafone, Deutsche Telekom and KPN, which shows a certain shift towards value-style companies on the part of the blend fund managers.

Large Growth Equity Funds

value

There are no major changes in the most repeated stocks in the top positions of the Large Growth funds. The Danish pharmaceutical company Novo Nordisk (3-star rating, Wide Moat) remains the preferred stock for fund managers, with a presence in five of the six funds of our list. The technology company ASML Holding (3-star rating, Wide Moat) also remains well positioned in the Top 10 of the portfolios.

As for the stocks entering into the Top 10 this month, many of them are companies with competitive advantages: Novo Nordisk (which has a Wide Moat and enters in tenth position in the MFS European Research portfolio), Kering (Narrow Moat), Atlas Copco (Narrow Moat) and Amadeus (Narrow Moat).

Large Value Equity Funds

value

As last month, the pharmaceutical company GlaxoSmithKline (5-star rating, Wide Moat) dominates the portfolios of the European Large Value funds. It is present in the Top 10 of four of the six portfolios analysed. It ranks first in the Brandes European Value fund and second in the Franklin Mutual European fund as well as in the Kempen European High Yield fund.

Compared to last month, the energy sector is more prominent. French Total (4-star rating, No Moat), for example, appears in the Top 10 of two funds. In particular, it is a new stock in the AB Eurozone Equity top 10 holdings.

 

What Have Fund Managers Been Buying?

Read the full series

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.

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About Author

Fernando Luque

Fernando Luque  is Senior Financial Editor at Morningstar Spain