Anand’s European equity fund awarded ‘A’ rating

The F&C European Growth & Income Fund, managed by Paras Anand, has been awarded a new 'A‘ rating from Standard and Poor's Fund Research.

Anand, who heads up the F&C European Equities Team, took over as lead manager in September 2008. Following approval from shareholders, Anand altered the strategy of the former F&C European Fund to generate a combination of income and capital appreciation for long-term investors, based on evidence of a clear evolution of dividend culture in Continental Europe to mirror that in the UK stock market.

Anand's selection process begins with predominantly bottom-up company analysis, seeking out opportunities within three broad categories - high quality and currently undervalued businesses that are likely to provide compelling long-term returns; strong companies with share prices that reflect short-term difficulties whilst overlooking attractive and lasting prospects; and companies with shareholder-friendly management early in their lifecycle, leading to exceptional returns over the long-term. Only the best ideas warrant inclusion in a concentrated portfolio of 40-50 high-conviction companies.

The option of receiving a quarterly income has attracted interest from a broader variety of investors, from retail to discretionary private wealth clients. Moreover, adopting twin objectives has seen fund performance improve under Anand's tenure, with the fund returning 15.8% (gross of management fees) versus the benchmark FTSE AWD Europe ex UK total return of 10.9%.

S&P's analysts were impressed by the "clear and disciplined team approach, led by an experienced fund manager" which "comfortably supports an S&P A rating."

Anand commented: "This is excellent news and a significant endorsement from Standard & Poor's for the process which we have successfully developed over the last two years since altering the fund's mandate.

We continue to believe that there is clear value in Europe as a whole, particularly among large cap companies which is where we currently believe the best long-term investment opportunities exist. Our focus remains on good-quality businesses, especially those with a proven record of pricing power, and out-of-favour sectors such as financials."