As far as more generalist offerings are concerned, a well-known European stockpicker has clearly made his mark. Alexander Darwall, who works on both the Jupiter European fund and its closed-ended equivalent, European Opportunities, is prominent across most time horizons.
Because our analysis only includes products with five-year track records, some more recent launches are been excluded from the analysis. But even when those are added into the mix, Mr Darwall’s offerings stand out.
Changing of the guard
Mr Darwall’s funds took a hit earlier this year when Wirecard, the largest holding for both, saw its shares plunge on the back of Financial Times reports raising questions over the company’s accounting practices. At the end of May Wirecard represented 8.9 per cent of the open-ended fund and 14.6 per cent of the trust.
Another pressing concern for investors is the fact that Mr Darwall is set to relinquish control of the open-ended fund, ceding control to former Columbia Threadneedle fund manager Mark Nichols. However, he will continue to run the investment trust.
For those seeking an alternative to Jupiter’s offerings, there is plenty of variety on offer. Our five-year analysis brings in funds from 16 different providers and a variety of different approaches. Table 1 contains four investment trusts, two funds with an explicit onus on income, and offerings from well-known providers and specialist, boutique asset managers alike.
While the analysis only takes in funds that have proved themselves over a longer time horizon, there is one other name that lacks a five-year track record, but has stood out since its launch in December 2015. Miton European Opportunities, which is managed by Carlos Moreno and Thomas Brown with a bias toward medium-sized companies, would sit in second place over three years and third over one year if included in our table.
Ups and downs
Funds operating in this space have witnessed serious volatility in the past: the average IA Europe ex UK fund lost nearly 16 per cent in 2011, a year that saw the eurozone debt crisis reach its peak. Life has been calmer in recent years, but European equity funds can still experience ups and downs.
A look at the discrete annual returns in Table 1 illustrates this clearly enough. In the year to May 31 2017, a period that saw the pound tumble to a multi-decade low after the Brexit vote, the average IA Europe ex UK fund gained some 33 per cent in sterling terms. But returns elsewhere over this five-year period have been less heartening.
