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Baring Europe Select Trust shows strong performance

4th September 2012 Print

Baring Asset Management ("Barings"), the international investment firm, is celebrating another successful year for the Baring Europe Select Trust as the fund marks its twenty-eighth anniversary.

Launched in August 1984, the fund has returned 10.2% in Sterling terms over the year to date, while the HSBC Smaller Companies Europe ex UK Index has delivered just 0.8% over the same period. With total assets under management standing at £313.2 million as of 31st July 2012, the fund continues to work towards its objective of achieving long-term capital growth by investing directly in securities of European companies, including small growth companies or "niche" opportunities. Since inception in 1984 this fund has returned a cumulative figure of 3, 730%.

Unlike their large-cap peers, European small-cap equities are predominantly driven by stock specific issues, rather than external macroeconomic forces, meaning that stock selection is vital when investing in smaller companies. To this end, Barings places significant emphasis on company research to identify firms with strong balance sheets, sustainable margins and quality management; a strategy that underpins the fund's strong long-term performance record.

Nick Williams, Investment Manager, Baring Europe Select Trust commented, "Despite the weak outlook for growth in Europe, there are smaller companies in the region which continue to flourish. French payment services provider Ingenico is a case in point and the company continues to register strong results owing to its exposure to the growing trend for mobile commerce solutions.

"While stock selection has led the Europe Select Trust to maintain a clear preference for core markets such as Germany and France, the recent performance of Spanish Health Care firm Grifols and Italian bank Banca Generali highlight that it is possible for individual companies in the periphery to shine and prosper if they offer competitive products, valuable services or have exposure to resilient growth in the US and the emerging markets."

Nick Williams concludes: "Although recent comments by European Central Bank President Mario Draghi to do "whatever it takes" to safeguard the euro are encouraging, it remains difficult to be anything more than cautious on the near-term outlook for economic activity in Europe. However, recent months have shown that it is possible for some stocks to perform well irrespective of the macroeconomic backdrop and we believe that there is significant potential for selected smaller companies to continue to perform strongly in the coming months."