How investors can gain exposure to Europe

Sheridan Admans, investment adviser at The Share Centre explains how investors can benefit from exposure to Europe, names his favourite fund in this investment arena and gives his views on a new offering from J O Hambro Capital Management (JOHCM).

"Investing in companies in the European Union should provide diversification that an investment portfolio based solely in UK companies may 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 the European banking system. Volatility could persist for some time but this is not necessarily a bad thing.

"Concerns over debt have led the Euro lower and a further upset could apply further pressure to the currency. So for the brave, now might be a good time to dip your toe into European investments. As Warren Buffet says, "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful".

"Our favourite fund within the sector is the BlackRock European Dynamics fund. This fund invests across the all-cap market, comprising around 35-65 companies. Fund manager, Alister Hibbert, and his team have an excellent track record of finding value in European assets despite market conditions.  A weaker currency could also have benefits for European companies as exports should start to seem more attractive.

"In terms of performance the fund has outperformed its sector across all time periods not only in times of positive market sentiment, but also when conditions are tough and markets are in decline.

Commenting on the new JOHCM All Europe Dynamic Growth fund, Admans said: "JOHCM has a selection of European funds, and the inclusion of a dynamic growth fund should complete their offering in the region.

"Fund managers, Trygve Toraasen and Carlos Moreno managed a number of funds at Fidelity before taking up management of the European Dynamic Growth fund at Thames Rivers Capital, circa mid 2009. In such a short period of time, the pair delivered strong performance of their respective benchmark, something we would very much hope to see at JOHCM."