European Equity Fund

Risk Considerations

The Fund is actively managed and invests mainly in a diversified portfolio of shares of European companies.
Investment in the Fund involves risks, including general investment risk, equity market risk, risks associated with depositary receipts, exclusion criteria risk, geographic concentration risk and Eurozone risk, risk associated with the changes resulting from the United Kingdom’s exit from the EU, small and mid-capitalisation shares risk and currency risk which may result in loss of a part or the entire amount of your investment.
The Fund may use derivatives for hedging and efficient portfolio management and is subject to derivatives risk. Exposure to derivatives may lead to a risk of significant loss by the Fund.
The value of the Fund can be volatile and could go down substantially.
Investors should not invest in the Fund solely based on this website.

Investment involves risk. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Strategy

Fund Summary

Actively managed and invests mainly in a diversified portfolio of shares of European companies.

No data available

Risks

The following risks are materially relevant to the fund. Please click here to view the definitions of the risks listed below.

Currency
Equities
ESG
Geographic concentration
Investment fund
Management
Market
Operational
Small/mid cap
Style

Typical Investor

Investors who plan to invest for the medium to long term, and who:

• are interested in investment growth
• understand and can accept the risks of the fund, including the risks of investing in equities

Purchases

Please Note

There is currently limited Purchases & Sales data for this fund. Please contact us for more information.

Sales

Please Note

There is currently limited Purchases & Sales data for this fund. Please contact us for more information.

30-Jun-2022 - Tobias Mueller, Portfolio Manager, European Select Equity Strategy,

We initiated in Essity Aktiebolag, a global hygiene products company, because of attractive valuations and its defensive qualities. In our view, Essity should adjust to the higher prices of raw materials?assuming they don't worsen?and, over time, management should be able to reposition the company into higher value-added segments, reducing dependence on raw materials and the resulting earnings volatility.
We added AXA, a global composite insurer and asset manager, at an attractive valuation. We think return on equity should rise strongly due to an improvement in profitability at commercial insurer XL, back book disposals, capital return, strong cost control, and higher interest rates.
We opened a position in Enel, an Italy-based multinational power company and an integrated operator in the global electricity, gas, and renewables markets. In our view, Enel is a leader of the energy transition in Europe and should benefit considerably from European Union initiatives to curb carbon emissions. The company has a strong management team and a strong renewables pipeline and pays an attractive dividend.
We exited our holding in InterContinental Hotel Group, the third-largest hotel franchisor, to recycle funds into higher-conviction ideas. The company is having to contend with continuing disruptions to the travel and leisure industries caused by the coronavirus, and new unit growth is slowing.
We exited Husqvarna, a Sweden-based company that makes outdoor power and consumer watering products, cutting equipment, and diamond tools for the construction and stone industries. The company issued a profit warning due to a shortage of semiconductors for its robotic lawnmowers and engines for its garden tractors. The Ukraine conflict is compounding existing logistical and supply problems. Increased costs for raw materials, energy, and transportation are set to dent earnings, to a greater extent than the market appears to be expecting.

Contributors

Please Note

There is currently limited data for this fund. Please contact us for more information.

Detractors

Please Note

There is currently limited data for this fund. Please contact us for more information.

30-Jun-2022 - Tobias Mueller, Portfolio Manager, European Select Equity Strategy,

Ashtead, an equipment rental company, posted strong fiscal year 2022 results that beat expectations as customers opted to rent equipment rather than buy it due to supply chain constraints. However, the shares continued to decline from an overextended level at the end of last year against a less favorable economic backdrop and, partly, as the U.S. dollar strengthened against the UK pound, reducing the value of earnings when translated back into the home currency.
Rockwool International, a manufacturer of stone wool for insulation and other applications, is another company that fell from overextended levels at the end of last year as market concerns about elevated inflation, central bank policy tightening, and slowing growth intensified. The company was also strongly affected by the war in Ukraine, which drove up the costs of raw materials, energy, and logistics, further eroding margins that were already under pressure from elevated inflation. Even so, the company reported strong first-quarter results, with sales significantly higher, but mainly due to volume growth rather than price hikes.
Zalando, Europe's largest online fashion retail platform, declined sharply year-to-date from overextended levels as well. The stock was a beneficiary of the coronavirus pandemic, which drove consumers online, but this tailwind waned as economies began to reopen. First-quarter results were lackluster, as expected, and guidance was lowered, with management citing the negative impact from the Ukraine conflict. However, the economic backdrop worsened in the second quarter, with higher costs and a loss in consumer confidence denting discretionary spending. The company issued a profit warning for second-quarter and 2022 earnings at the end of the period, surprising the market with the size of its sales and profit cuts.
Greggs, a UK fast-food retailer, posted decent company results for the first quarter as economies reopened and the company opened new stores and adapted to changed conditions; for example, increasing deliveries from shops. However, the shares fell amid concerns about increasing market-wide cost pressures and expectations of a reduction in consumer incomes as the economy teeters on the brink of recession.
We do not own mining names, such as Rio Tinto, that suffered as commodity prices sagged, partly due to lower demand from China, which imposed coronavirus lockdowns, and the higher U.S. dollar. Some of our other holdings, including paper and packing companies Mayr-Melnhof Karton and Mondi, also rebounded after coping with the previous quarter's challenging jump in input costs and resulting pricing decisions.
Verallia, a glass container manufacturing company, rose after delivering resilient first-quarter results that showed strong demand and drove excellent revenue growth, while efficiency gains and significant price increases maintained decent margin expansion. An effective hedging program helped to contain rising energy costs as well.
Our holding in Sampo, a Finland-based financial holdings company, outperformed. The company sold its 25% stake in Nordea Bank, simplifying its structure, and posted strong first-quarter results, lifted by property and casualty insurer If. Investors also expect the company to launch a share buyback with the proceeds from the sale of Nordea, a Nordic bank.

Disclosure on Vendor Indices can be found here.

Current Year Performance

Annualised Performance

Team

Fees

Risks

Typical Investor

Calendar Year Performance

Cumulative Performance

Top 10 Holdings

Purchases

Sales

Contributors

Detractors

Sector Attribution

Region Diversification

Geographical Attribution - Top and Bottom Five by Total Value Added

Team