The surprisingly strong UK election result for the Conservatives has put the country on course to debate its involvement in the European Union.
While the ramifications of a so-called ‘Brexit’ are set to be discussed in more detail over the coming months, Citywire Global has looked at outperformers operating without a UK emphasis.
Shining a light on the Equity – Europe ex UK sector, there are currently 107 fund managers with at least a year of market experience and 74 who have been running funds in this sector since May 2010.
Over the longer timeframe, the average of this peer group returned 94.4%, and in four of the five years achieved double-digit returns. This is while the most commonly held benchmark, the FTSE World Europe ex UK TR EUR, rose 88% over the same five-year period.
Against this backdrop, however, there is only one regional specialist who has beaten both the longer-term average and index performance, while also outperforming the average manager in each individual 12-month period.
John Bennett, Henderson
Five year total return (May 2010-May 2015): 122.5%
Best year of outperformance vs. average: +4.38% in 2011/12
Citywire AA-rated European equity veteran John Bennett has put his lengthy tenure and experience to good use and come out as the sole outperformer in the sector. This is for his work across three Henderson funds, two UK-domiciled and one Ucits-compliant vehicle.
Focusing on the Ucits fund, the €4 billion Henderson Gartmore Continental European fund, Bennett has a strong emphasis on ‘core’ Europe. He has a 20.3% allocation to Germany, which is ahead of Switzerland (19.5%) and France (14.9%) in terms of country allocation.
This coincides with Bennett’s believe that there is little value to be found in emerging Europe, or ‘submerging Europe’ as he branded the sector in January of this year. This stance, he said, was driven by a particularly bearish outlook for Russia.
Bennett, who has 26 years of industry experience, has a strong leaning towards the healthcare sector and has almost one-third of his fund allocated here. This links to his believe of a ‘stealth bull’ lurking in the pharmaceuticals sector, which saw him bulk up positions here in August 2012.
More recently, Bennett has taken the recent low yield environment as a cue to reduce so-called ‘bond proxies’. In an investor update in March, Bennett said he had reduced consumer staples stocks from 12% of the fund to 6% for fear of being caught out by rising rates.