The stocks they favour at the moment are strong European Banks – KBC, Commerzbank and ING are examples. Commerzbank has returned nearly 100% since October
Since Draghi’s ‘do whatever it takes’ speech in 2012 the markets have become less worried about the collapse of the Euro and peripheral economies. There is a greater confidence around political stability in Europe.
However, investors continue to be wary of Europe which is reflected in negative inflows over the last five years. Towards the end of 2013 the outflows reduced and although still negative in aggregate it continues to narrow. As a consequence we are seeing more European fund managers on the road explaining why now is the time to invest.
We recently reviewed the JPM Europe Dynamic Fund and in this review we will consider the BlackRock Greater Europe Fund. The key differences between the funds are that the Trust can invest up to 25% in Emerging Europe (currently it holds around 11% in Emerging Europe), it holds fewer stocks (currently 59 but can be as low as 30 and as high as 70) and there is a conviction bias with the highest holding making up nearly 6% of the Trust.
Performance is similar to JPM Europe Dynamic Fund although it underperformed the JPM Fund in 2013. It has significantly outperformed the benchmark over the last five years. This is an investment trust and currently has a narrow discount of around 2%.