The fund is a hidden gem with strong outperformance driven by a contrarian approach to investing.
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 have met managers from JPM and BlackRock recently and although the funds are good we haven’t had a sense of anything special.
Cazenove, a boutique investment house, was recently purchased by Schroders and one of the funds which came across was the Cazenove European Income Fund managed by James Sym.
The fund was established in May 2012 to take advantage of opportunities in Europe and has an unconstrained, conviction led philosophy making it stand out from the crowd.
In our meeting with James there were two areas we wanted to explore; firstly there is an argument that stocks in Europe have been so beaten up that anyone can make money and therefore can James continue to deliver in a recovering market, and secondly the culture at Cazenove is very different to Schroders and will they continue to support him in periods of underperformance.