Baring Europe Select Fund
Sheridan Admans, investment adviser at The Share Centre, outlines how to achieve long term capital growth by investing directly, and where appropriate, indirectly in securities of European companies via the Barings Europe Select Fund.
"Funds that are exposed to countries that form part of the European Union psychology provide UK investors with a natural progression into overseas markets. This is partly due to close geographical proximity, access to information and brand awareness.
"Investing in companies in the European Union should provide diversification that an investment portfolio based solely in UK companies could not provide, for example Denmark is a world leader in alternative energy solutions and Germany has world class engineering companies and car manufacturers.
"However markets remain fractious over continued European sovereign debt concerns and the strength of some German and Spanish banks. The German banks are to undergo stress testing which could result in further market volatility over the summer. However, it would seem that the German's bank rescue fund could potentially assist as it has approximately £300 billion in credit guarantees to call upon if necessary.
"Concerns over debt have led the Euro lower and a further upset could apply further pressure to the currency, a weaker currency could have benefits for European companies as exports should start to seem more attractive. So for the brave, now might be a good time to dip your toe into European investments such as the Baring Europe select Fund. As Warren Buffet says, "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful".
"This fund is suitable to those investors who want access to European small cap companies, are willing to accept a medium level of risk and believe that European small cap companies offer the potential for a higher degree of growth potential over large cap companies over the long-term.
"The Fund manager, Nick Williams' policy is to seek growth predominantly through investment in securities of carefully selected companies quoted on the principal European Stock Markets whilst retaining the flexibility to invest in small growth companies or "niche" opportunities should the opportunity arise.
"Williams predominantly takes a bottom up approach to investing (stock picking); identifying those companies that have been through their screening, company visit and fundamental research analysis. The fund itself will be diversified to the degree that it will generally hold between 80-110 growth stocks. Despite the bottom up approach, Nick keeps in mind Baring's in-house economic view to ensure that any themes identified are exploited where possible.
The Baring Europe Select Fund has an annual charge of 1.5% and an initial charge of 5%. The minimum initial investment is £1000, with top ups of £500.
As the fund features in The Share Centre's Platinum 120 range, customers wishing to invest in the Baring Europe Select Fund will not have to pay the initial charge or purchase dealing commission. Customers can also invest in the fund from as little as £10.