Also beneficial was the fund’s underweight position in Anheuser-Busch, the maker of Budweiser, as the beverages company underperformed.
On the negative side, performance was hit by an underweight position in pharmaceuticals, with Roche, for example, helped by a positive market reappraisal of its potential. An overweight position in Boliden, a Swedish copper and zinc mining company, was also unhelpful, as the company was hit by a longer-than-expected plant shutdown in the first half 2013 that led to earnings downgrades.
In spite of this, the outlook is positive, believes Mr Baker, with better than expected PMIs implying an acceleration of growth. He also sees a big reduction in “tail risks” or potential to spring a big negative surprise, from countries such as Greece and Ireland. Valuations too are attractive, both absolutely, and also relatively, for example, to the US. For those looking for an alternative to some of the traditional European funds this could be one to watch.
