Objective

Seeks capital appreciation through investment in European equities with market capitalization greater than 65 million euros. Focuses exclusively on developed European markets.

Strategy

Diversify portfolio using strict controls on the level of investment in any particular industry to maximise the impact of individual stock selection – assess relative earnings strength and valuation discrepancies within industry groups, based upon the premise that stock markets are reasonably, but not perfectly, efficient; investor sentiment is considered through analysis of earnings revisions, analyst recommendations and price behavior

Fund Facts
Asset Manager
  • Degroof Petercam Asset Management, Brussels, Belgium
Benchmark MSCI Europe Index
Fund Inception Date July 12, 2010
Mimimum Investment €50,000
Expense Ratio 1.55%
ISIN IE00B3DD4Y80

Annual Average Total Returns
(%) as of 30/06/2020

Trailing 3
Months
1
Yr
3
Yrs
5
Yrs
10
Yrs
Since
Inception
Inception
Date
European Equity Fund 14.92 -12.54 -4.03 -1.02 * 4.23 11/7/2010
MSCI Europe Index 12.9 -5.01 1.11 1.90 * 6.94

Characteristics as of 31/03/2020

Statistics Fund Index
Weighted Median Market Cap € 13.4B € 36.8B
Average Price/Book 1.0x 1.4x
Average Price/Earnings 11.4x 14.6x
Average Yield 4.4% 4.4%
Beta (ex ante) 1 0
Active Share 76.9 N/A
5 Yr Earnings Rate 8.6% 8.1%
Ten Largest Portfolio Holdings 18.6% 4.4%
# Securities in Portfolio 127 438
Turnover Rate (12 Mo) 73.8 N/A
Fund Size € 118.5MM
Sector Fund Index Diff.
Communication Services 4.2 4.3 0.0
Consumer Discretionary 9.0 9.3 -0.4
Consumer Staples 15.7 15.6 0.0
Energy 5.5 5.7 -0.2
Financials 15.7 15.6 0.1
Healthcare 16.7 16.6 0.2
Industrials 11.1 12.8 -1.7
Information Technology 6.3 6.7 -0.4
Materials 7.1 7.1 0.0
Real Estate 1.0 1.3 -0.4
Utilities 5.2 5.0 0.1
Cash 2.6 0.0 2.6
Country Fund Index
France 30.9 17.4
Germany 11.0 13.3
Italy 6.4 3.5
United Kingdom 15.4 24.4
United States 0.6 0.0
Other Developed Europe 35.8 41.4
Top 10 Holdings % Weight
L'Oreal SA 2.8
Total SA 2.1
Tecan Group AG 2.1
UCB S.A. 2.0
QIAGEN NV 1.7
Siemens AG 1.6
Vifor Pharma AG 1.6
Danone SA 1.6
Galenica AG 1.6
Alcon, Inc. 1.6
  • Q1 2020 Performance Review

    12-Month Review

    • The market turmoil of the first quarter exacerbated more recent patterns – growth outpaced value and small cap continued to lag larger cap names – leading to the outsized level of underperformance.
    • By design, most of the excess return is generated through stock selection; the biggest detractors for the year were stock decisions in Industrials, Financials, and Health Care. The only positive returns were in Information Technology.
    • In Industrials, the same stocks that drove underperformance for the first quarter were also significant detractors for the year. As expected, the holdings tended to have lower valuations and smaller capitalizations.
    • In Financials, size did not matter as much as valuations and the Fund’s focus on stocks with low valuations were the largest detractors.
      The negative stock selection in Health Care came from stocks not owned.

    3-Month Review

    • With sector weights very close to the index, almost all excess return will be attributable to stock selection within sectors. Results for the first quarter reflect this.
    • Given the focus on value as the primary driver of portfolio holdings, it is not surprising that the Fund underperformed.
    • Attribution shows that holdings in Industrials and Financials detracted the most.
    • While underperformance was driven by a broad group of stocks across all sectors, not owning specific names had significant negative impact on relative results.
    • As long as the market favors other factors over value, the value tilt will be a significant hindrance to relative performance, as was the case in the first quarter. Overweights in lower P/E stocks and underweights in the higher P/E stocks within the index detracted relative return in the first quarter.

    Current Positioning

    • The Fund holds securities across the market capitalization spectrum although there is a distinct tilt to small and mid-cap names. The weighted average market cap of the portfolio is less than half that of the benchmark index.
    • The overall P/E and P/B ratios for the portfolio are lower than the index, indicative of the fund’s value tilt.
    • Sector weights do not deviate significantly from the index.
  • Fund Fact Sheet

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