Poland is set to go to the polls on October 25 and, despite having no single party take a majority since the fall of communism, early expectations are of a strong shift to the right.
The parliamentary elections come against a positive backdrop for Poland, which was the only EU member state to avoid recession and it has retained its place as one of Europe’s fastest growing economies.
With that in mind, Citywire Global has taken a closer look at the top-performing managers focused on Eastern European equities. There are currently 97 managers running funds focused on the region with a three-year track record in the Citywire database. The average of these having lost 14.40% over the 36 months to October 2015.
In this analysis, Citywire Global takes a look at the top five outperforming managers and manager teams to uncover those posting the strongest performance and also best-placed to benefit whatever the Polish results.
5. Ingrid Trawinski and Isabel Levy, Metropole Gestion SA
Total return (October 2012-October 2015): 24.69%
In terms of companies, Bank Pekao is sixth largest holding at 4.6% and the only Polish firm in the top ten. The Italian bank UniCredit owns 59% of the company and UniCredit is the eight largest holding at 4.3% in the fund.
On a sector basis the duo favour financials, which at 41.30% is overweight against the benchmark allocation of 23.71%. Telecommunications make up the second largest sector at 21.25%, which is treble the index bet of 7.29%.
4. Mehis Raud, Trignon Capital
Fund: Trignon New Europe
Total return (October 2012-October 2015): 27.19%
Citywire AA-rated Mehis Raud has been managing the Trigon New Europe fund since March 2007. Poland is currently the largest country allocation at 26.1% and, according to the latest fund factsheet, Raud has adopted this positioning to capitalise on its status as being among the fastest growing regions in the world.
The fourth largest holding is Poland’s biggest bank PKO bank Polski, which also comes as part of a wider interest in banks and financials in Eastern Europe. Raud currently has 36% of the fund allocated to financials.
3. Kristel Kivinurm, Valdur Jaht and Peter Priisalm, Avaron Asset Management
Fund: Avaron Emerging Europe
Total return (October 2012-October 2015): 28.70%
Regional experts Kristel Kivinurm, Valdur Jaht and Peter Priisalm take the bronze medal in this countdown. Poland is the fifth largest country exposure in the co-managed Avaron Emerging Europe fund at 10.2%.
The managers, who are all AAA-rated, have 31 positions in the highly-concentrated fund with the top 10 holdings making up 46.5% of the fund. The trio prefer value-orientated stocks which are either small or mid-cap names.
In terms of sectors, the largest allocation is to financials, which makes up 29.5% of the fund followed by utilities at 13.7%. The trio currently hold almost a quarter of the fund as cash, which was increased over the past three months.
2. Sandra Jankovic, Danske Invest
Total return (October 2012-October 2015): 29.18%
Taking second place is Citywire AAA-rated Sandra Jankovic, who has managed the Danske Invest Trans-Balkan fund since February 2011.
The fund concentrates on the Balkan region as a whole and invests in firms doing a major part of their business in the region. Romania is the largest country allocation at 33.3% followed by Turkey at 16.6%.
The top holding is the Nikola Tesla Airport in Belgrade at 8.7%. Jankovic also has 5.3% allocated to BRD Group Societe Generale, a Romanian bank in which the French group Société Générale hold a 59.37% stake.
1. Joachim Waltl, Security Kapitalanlage AG
Total return (October 2012-October 2015): 29.35%
Beating Jankovic by a small margin over the three-year analysis period is Joachim Waltl, who runs the Apollo Emerging Europe fund.
Four of the top five holdings in the fund are Polish firms. The largest being PZU Group at 7.41%, which is a leading insurance company in the country. The second biggest holding is PKO Bank Polski at 6.99%, which is Poland’s largest bank. He has a 5.85% holding in PKN Orlen, which is the world’s 31st largest oil company.
In terms of sectors, Waltl prefers financials and has dedicated 42.39% of the fund to them. He also likes the energy sector, which is the second largest allocation at 27.76%