With Europe’s debt crisis showing no sign of abating, it’s no wonder investors are ignoring the region. But being brave when the crowd is fearful is often a recipe for strong returns. “Europe is home to many outstanding companies that lead the world in their fields, which are continuing to thrive,” say Jon Hughman and Leonora Walters in the Investors Chronicle. The continental capital goods, pharmaceuticals and telecoms sectors are prime examples, and demand for European goods is surging in emerging markets. Germany’s exports jumped by 18% last year to $1.3trn, a tally second only to China.
The recent crisis has left European equities “generationally cheap”, says Aberdeen Asset Management’s Jeremy Whitley. So consider tucking away an investment trust – which could well fall further before rebounding. Hughman and Walters suggest the Henderson Eurotrust and the Jupiter European Opportunities Trust, while Oriel Securities likes Fidelity European Values. These trusts are all trading on discounts of more than 10% to their underlying net asset value.