Edison Investment Research

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The European Investment Trust

Review of management arrangements

Review | Investment trusts | 19/06/2019

The European Investment Trust (EUT) is managed by Craig Armour at Edinburgh Partners. This company follows a strict value-based investment process, based on the philosophy that there is a stable relationship between expected share price total returns and a company’s current share price compared with its long-term earnings per share (see chart below). In recent years, global markets have been led by growth rather than value stocks, and EUT’s investment performance has consequently lagged…

Fidelity European Values

Outperforming its benchmark and peer group

Review | Investment trusts | 19/06/2019

Fidelity European Values (FEV) has had a conspicuously strong period of outperformance since March 2017, building on its positive long-term track record. Its NAV total return is ahead of the AIC Europe sector average over one, three and five years, ranking first or second out of eight over each period, and FEV has clearly outperformed its benchmark over one, three, five and 10 years to end-May 2019. Helped by a reallocation of expenses between the revenue and capital accounts, the board raised the…

Jupiter US Smaller Companies

Market volatility providing more opportunities

Review | Investment trusts | 18/06/2019

Jupiter US Smaller Companies (JUS) is continuing to deliver improved investment performance following a tightening up of its investment process in October 2017. The trust has outperformed its small-cap equity benchmark over the last one and three years in both NAV and share price terms. Increased stock market volatility in recent months has presented manager Robert Siddles with an increasing array of attractive investment opportunities across a range of industries; although this has increased portfolio…

BB Biotech

Concentrated portfolio offering true differentiation

Review | Investment trusts | 18/06/2019

BB Biotech (BION) has continued the process of refocusing its portfolio on innovative smaller and mid-cap stocks, selling out of bigger names such as Novo Nordisk and Regeneron, and taking new positions in smaller stocks at the cutting edge of genetic medicine. The Switzerland-based fund retains a highly concentrated portfolio of c 30–35 stocks (and five to eight core holdings make up more than half of total assets), but has a broad spread of clinical indications and development stages.…

TR European Growth Trust

Finding small-cap value opportunities

Review | Investment trusts | 18/06/2019

TR European Growth Trust (TRG) has seen its share price de-rate substantially over the past 18 months, from a c 3% premium to NAV to a c 15% discount, following a period in which its small-cap value style of investing has been out of favour with investors. However, its NAV has risen c 13% year to date, with lead manager Ollie Beckett taking advantage of depressed valuations in smaller European companies whose growth potential he believes is underappreciated by the wider market. The…

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