It is frequently said that stock markets despise uncertainty, but in the case of both Brexit and Donald Trump this has not played out. Various equity markets have been on song since the start of 2017, with some markets, including the UK’s own FTSE 100 index, entering uncharted territory. The index clocked up another record high today (15 May), hitting a peak of 7458 and surpassing its previous best of 7447 achieved in the middle of March.
While the UK market has been making the headlines, Europe’s resurgence has gone virtually unnoticed. Five of our top 10 performing Rated Funds since the start of 2017 are trusts investing in the region.
Top of the pile from 1 January to 10 May is Henderson TR European Growth trust (up 29.1 per cent); also in the top 10 are European Assets, Jupiter European Opportunities, Henderson European Focus and JP Morgan European Income.
Europe has had its fair share of problems over the past decade, most notably the sovereign debt crisis in the summer of 2011. More recently sentiment has been soured by political uncertainty, although the picture has brightened somewhat with centre-left Emmanuel Macron’s victory in the French presidential election. But against a backdrop of other elections – in Germany and Italy – over the next 12 months, investor caution will no doubt remain.
But it’s important not to worry not too much about the political stories unrolling, and equally important not to become too obsessed with where companies are domiciled, when investing in Europe, points out Ben Willis of wealth manager Whitechurch Securities.
He adds: ‘Successful European managers have been keen to emphasise it is the quality and diversity of leading global businesses that makes European stock markets such an attractive universe for stock-pickers. Over the longer term there is plenty to suggest that active management is still favourable in Europe, with the average manager beating index funds over the past three and five years.’
Just over one third of our Rated Funds (67 of 198) have delivered returns in excess of 10 per cent since the start of 2017. Other strong performers include Old Mutual UK Smaller Companies Focus, up 26.7 per cent, which places the fund second overall. BlackRock Throgmorton IT, Monks IT, Jupiter India and Aberdeen New India IT all posted gains of more than 20 per cent.
At the other end of the table, bringing up the rear are JP Morgan US Smaller Companies IT (-7.5 per cent) and Investec Global Gold (-7.5 per cent), followed by The North American Income IT (-5.1 per cent).
|Rated fund||Total return (%)*|
|Henderson TR European Growth IT||29.1|
|Old Mututal UK Smaller Companies IT||26.7|
|F&C European Assets IT||25.5|
|Jupiter European Opportunities IT||23.1|
|Henderson European Focus IT||23|
|BlackRock Throgmorton IT||22.6|
|Aberdeen New India IT||20|
|JP Morgan European Income IT||19.7|
|*From 1 January 2017 to 10 May, 2017. Source: FE Trustnet|
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