European Equities

Whilst there is ample opportunity to invest in strong domestic franchises, European equities also include a considerable number of global brands, technology leaders and firms with cutting-edge industrial expertise. Today, the picture in Europe has changed: political instability has faded and the growth rate is more synchronised and less fragmented.

Opportunities:

• The stable economy and growth rates supported by accommodative monetary policy make European equities attractive.
• Political risks in Europe have receded, especially since the French elections.
• Earnings estimates in European equities are strong with upward revisions.
• Core Europe is showing strong confidence indicators with some signs of inflation picking up.
• The funds are managed with a bottom-up approach by an experienced team of stock pickers with a long-term investment focus.

Investment philosophy & process:

The team uses top-down analysis based on their thematic ideas with a bottom-up investment process which leads to a high-conviction, concentrated portfolio of 50–70 stocks.

After researching the market and sectors, they come up with thematic, macroeconomic and sector views. Then, most of the process is bottom-up through quantitative screening, company meetings and broker research inputs.

• Quantitative screening and research are based on valuations, growth, income, and returns.
• Through meetings with European companies (500+ per year) the team gathers in-depth knowledge of their businesses.

The fund managers will take into account the political and economic environment, but only invest if they find companies that match their investment criteria from a balance sheet perspective.

The team applies strict risk management, analysing and controlling risk at stock, sector and overall portfolio level.