Fund Objective

To maximise long-term capital growth by investing primarily in continental European equities.

View on Past Performance

The fund underperformed as expensive stocks with poor growth characteristics outperformed, while our preferred stocks - those with strong value and/or growth characteristics - did not work well. Detractors included stock selection in the chemicals and industrial transportation sectors, while stock selection in the banks sector was positive, as were stock selection and an overweight position in the pharmaceuticals sector.At the stock level, the fund benefited from an overweight position in BNP Paribas, after earnings at the bank's securities unit beat analysts' estimates and it said it would not need to raise capital. Also positive in relative terms was an underweight position in Fortis, which was rescued by Benelux governments on mounting concern over its solvency.Stocklevel detractors included an overweight position in fertiliser maker Yara International, which fell back heavily despite a strong earnings outlook and an extremely cheap valuation. An overweight position in Smit Internationale was also negative after project delays at the marine salvage operator's lifting division weighed on first-half profit growth.However, the fund was boosted by an overweight position in Astrazeneca after the drugmaker received broker upgrades on its shortterm earnings and pipeline momentum.

Future Expectations

European stocks look attractively valued, but concerns over global economic growth may lead to further volatility.

Fund Details