Gerrard, the private client portfolio manager, has named seven onshore European funds as the pick o...
Gerrard, the private client portfolio manager, has named seven onshore European funds as the pick of the sector, including Anthony Bolton's Fidelity European fund.
The recommendation of the Fidelity fund as a higher risk, satellite portfolio places it alongside John Botham's Henderson European Capital Growth, Albert Morillo's Investec European and Adrian Farthing's Old Mutual European Blue Chip fund from Gerrard's sister asset management group.
The core holdings Gerrard analysts Robert White and Raj Basra recommend are the Norwich Union European Equity and Lazard European Alpha funds as the group's main choices. The Merrill Lynch European Investment Trust provides the group's core investment trust option.
Of Bolton's fund, White said: 'It provides an aggressive European holding with no internal risk constraints on Bolton at sector or stock level. The performance achieved has consistently been ahead of the FTSE Europe ex-UK index in both growth and value phases, but with large active sector bets and therefore greater risk. Fidelity has substantial resources at research level and the fund manager has over 20 years' experience managing European equities.'
The Norwich European Equity fund, managed by Ian McNeill, head of European Equities at MFM, offers large-cap exposure, as does the Lazard fund, which has been managed by Gabrielle Boyle since 1997, but which has more of a relative value focus. Morrillo's fund is a purer growth play giving exposure to Morrillo's stockpicking approach.
Of the Merrill Lynch trust, White said: 'Merrill Lynch European will normally maintain a marginally geared exposure to the market and is managed with risk controls that constrain geographic and sector positions.
'It now offers good value on a 13.8% discount when compared to both its recent trading range and the sector weighted average of 8.1%. A re-rating towards the sector average discount is merited given the good risk adjusted return achieved against the benchmark FTSE World Europe ex UK Index over the past three years.'
Farthing's Old Mutual European Blue Chip unit trust is predominantly focused on large capitalisation companies. White said: 'Historic performance highlights the manager's bias towards growth equities and this fund typically has a beta greater than 1% making it perform well in rising markets but poorly in falling markets.'
'The management team has previously demonstrated its ability to perform over the longer term.
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