European Assets Trust N.V.

European Equities

Rated Fund 2014-19. Pays a high yield part-funded from capital

European Assets is a smaller companies trust that won Money Observer’s Best European Trust award in 2014, 2015 and 2016. Its discount collapsed to 10% in 2018 from a small premium at the start of the year.

Sam Cosh, its manager since 2011, invests in a diversified portfolio of small to medium growth businesses across continental Europe. This area of the market is less well-researched, allowing value to be added from stock selection.

Performance was severely dented in October last year as higher US bond yields, global trade wars and European politics drove a heavy sell-off. Cosh, who works for BMO Global Asset Management, concedes that delivering a return below the benchmark is disappointing, but takes comfort from the underperformance coming entirely from companies that he believes have strong fundamentals and have been unfairly punished by the wider market sell-off.

The trust differentiates itself from competitors by offering an attractive yield. A dividend equivalent to 6% of net assets at the start of each financial year is paid out as portfolio income. It is important to note that these dividends, paid three times a year, are funded from a mix of income and capital so could erode the capital value of an investment over time, though dividends can of course be reinvested.

The fund is concentrated at around 40 holdings, with the top 10 accounting for 36% of assets.

Skerritts Wealth Management rates the trust as a “unique vehicle” for investors who want to gain access to European smaller companies and a regular income stream. “The discount to net assets is another attraction,” adds investment manager Charlie Lloyd.

Narrative and rating as of January 2019. 

See all Money Observer rated funds
Name
European Assets Trust N.V.
Manager
BMO Asset Management (Holdings) plc
Type
Closed Ended Investment Company
ISIN
NL0012838817
Sector
European Smaller Companies
Launched
12/10/1983
OCF
0.14 %
Risk Rating
3
3 Year Sharpe
0.34
3 Year Alpha
-6.37
Yield
0.1 %
Benchmark
EMIX Smlr European Coms Ex UK TR USD
Fund Size
£ 350.76 million
NAV
105
Gearing
97
Discount Premium
-8
To achieve growth of capital through investment in quoted small and medium-sized companies in Europe, excluding the United Kingdom. A high distribution policy has been adopted and dividends have been paid mainly out of current year net profits and other reserves.
Holding %
SpareBank 1 SR Bank ASA 4.04 %
Gerresheimer AG 3.95 %
Storebrand ASA 3.83 %
Sligro Food Group NV 3.76 %
IMCD NV 3.75 %
CTS Eventim AG & Co. KGaA 3.69 %
Forbo Holding AG 3.59 %
Tecan Group Ltd 3.44 %
Ringkjoebing Landbobank A/S 3.36 %
Cerved Group SpA 3.18 %
Region %
Eurozone 57.14 %
Europe - ex Euro 38.27 %
Sector %
Industrials 26.85 %
Financial Services 17.91 %
Basic materials 13.67 %
Consumer Cyclical 11.86 %
Consumer Defensive 10.43 %
Healthcare 9.97 %
Technology 7.36 %
Name
BMO Asset Management (Holdings) plc
Address
EC2A 2NY, London, United Kingdom
UCITS
No
Legal Structure
Closed Ended Investment Company

Managers

Lucy Morris
Joined 12/31/2017
David Moss
Joined 10/20/2011

David Moss is a fund manager and Head of the European equities team. From 1998-1999, he focused on UK Equity and prior to that he worked as a Fixed Interest Analyst focusing on the UK Gilt and Non-Gilt Markets. He joined the Group in 1996. David began his career in 1987 at Barclays Bank, where he worked as an Analyst on the Corporate Lending Team, working primarily with recovery situations for small to medium-sized enterprises. David graduated from the University of Loughborough in 1996 with a BSc Economics. He has obtained his ACIB and IIMR qualifications.

Sam Cosh
Joined 10/20/2011

Sam Cosh is a senior fund manager in the European equities team, responsible for the management of the BMO European Smaller Companies Fund (SICAV), the BMO European Smaller Companies Ex UK Fund and the European Assets Trust. Sam joined the firm in 2010 from BNP Investment Partners. He began his career in 2000 as a European Institutional analyst at Invesco before moving to Fortis Investments as a Portfolio Manager within their European SmallCaps team. Sam graduated with a BA (Hons) in Economics from Nottingham University in 1999, has attained the IMC and is a CFA Charterholder.

Data provided by Morningstar.

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