European stockmarkets are preoccupied with euro jitters, which are likely to continue for now. But with European stockmarkets still some 30% below their mid-2007 highs, much of the likely damage now looks baked into the region’s share prices. Indeed, some European countries are now hitting economic high spots. So this could be the right time to reconsider investing on the Continent.
With star manager Roger Guy retiring, the Gartmore European Investment Trust (LSE: GEO) may not seem the stand-out way to buy in. But Gartmore has moved fast to shore up confidence in the flagship European trust. Guy’s replacement will be seasoned sector specialist John Bennett (pictured), who was recruited earlier this year by the firm after 16 years with Julius Baer’s hedge fund arm GAM, where he was investment director. Bennett’s annualised return there was an impressive 7.3%.
And he’ll be on the spot to fire up the fund’s performance. Despite its name, the trust doesn’t have to employ Gartmore for its portfolio management. The trust’s board has negotiated a reduced notice period of three months, which it will keep reviewing. If the fund’s performance isn’t up to scratch, Gartmore could be fired. But the board also says it has “been encouraged by the commitment shown by the new team”.
Guy, who has run the £135m trust since 1996, will work with Bennett and his team on the transition. New investors can buy the fund at a 6% discount to net asset value. And that’s unlikely to grow. The board has just been given the green light by investors to buy back 15% of its own shares – which it surely will if the discount shows any signs of widening.
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Gartmore’s European top ten holdings
| Name of holding | % of assets |
|---|---|
| Nestlé | 4.4 |
| Telefonica | 3.7 |
| Novartis | 3.6 |
| Daimler | 2.7 |
| Total | 2.3 |
| Roche | 2.3 |
| BNP Paribas | 2.2 |
| Siemens | 2.1 |
| UBS | 2.1 |
| Christian Dior | 2.0 |