BWD Rensburg's Equity Growth unit trust is looking to boost its exposure to European equities to aro...
BWD Rensburg's Equity Growth unit trust is looking to boost its exposure to European equities to around 10% of the portfolio over the next six months, writes Leo Bland.
The fund, which is managed by Mark Hall, currently has around 2% in European stocks but he is looking to build this up as the group's knowledge of European stocks increases over time. BWD Rensburg has previously been focused on investing in UK securities but decided earlier this year to add a European element to the Equity Growth trust. Hall's continental holdings in Equity Growth include Nokia, French oil company Total Fina Elf and Spanish banking group BBVA. The fund currently holds around 100 stocks.
Hall said: "We have spent around six months looking at European stocks, looking at the trading ranges and how the different areas of the markets are performing. We are taking a cautious approach to adding European stocks as we do not want to go charging in buying stocks we know nothing about.
"Also, as a UK fund manager looking at Europe it is difficult to identify value there at the moment. In defensive and cyclical areas of the market such as food retailers and industrials we have found that the ratings of European stocks are higher than for their UK counterparts - I have found better value in the UK."
He added that in the telecoms and IT sectors, where Continental European markets have a significant representation, the outlook is not particularly encouraging and that now is not the right time to be buying these stocks.
Hall said: "Another factor has been the weakness of the euro but over the last six to eight weeks I have become slightly more confident that the euro is close to its bottom. If one picks the right stocks in Europe you are not going to get wiped out by the currency, which was a danger six to nine months ago."
BWD Equity Growth is ranked 54 out of 235 funds in the UK All Companies sector over three years on growth of 43% on an offer to bid basis.
The fund is ranked 110 out of 292 over one year, offer to bid on growth of 1.5%. Over three months the fund is 54 out of 304 on a bid to bid basis on growth of 0.2%.
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