“I believe it is too early to buy heavily into Europe,” says Mark Dampier of Hargreaves Lansdown in The Independent. “But I suspect that the weakness we will see in markets over coming months will be a genuine buying opportunity.” And Neptune European Opportunities is one fund he reckons you should keep on your watch list.
The fund has come top of its sector over the past three years, returning 64.77% against an average of 27.43% for the rest of the IMA Europe ex-UK sector. Fund manager Rob Burnett avoids picking stocks without first identifying the broader economic trends that might move them one way or another. This approach saw him get out of financials earlier this year, while the oil price spike saw him shift more than 10% of the fund’s portfolio into cash.
Prices have since fallen from their highs of $147 a barrel, which, alongside the conflict in Georgia, has hit investor confidence in Russia. But Russian oil and gas firms will outperform their global peers, he believes, due to their low extraction costs. The Russian government has also set aside oil revenues in recent years to buffer the economy.
Burnett also reckons the weaker euro will be good for European stockmarkets, which are heavily export-dependent. “There are still some attractive opportunities in Europe. It is a big and largely liquid marketplace,” says James Davies of the Chartwell Group in What Investment. “Burnett runs a concentrated portfolio, but one that is pretty well spread across sectors and individual countries.”
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Neptune European’s top ten holdings by sector
| Name of holding | % of assets |
| Materials | 25.2 |
| Industrials | 21.5 |
| Money market | 9.40 |
| Others | 8.40 |
| Financial | 8.00 |
| Healthcare | 7.20 |
| Telecommunications | 7.10 |
| Energy | 5.70 |
| Consumer staples | 4.70 |
| Utilities | 1.70 |