Following Emmanuel Macron’s defeat of populist Marine Le Pen in the French presidential election in early May, Europe’s political risk alert levels have dropped significantly and investors are piling into European equity stocks.
The results triggered $6.1 billion worth of inflows in the past week, according to global data firm EPFR.
Aside from the fading political risk, investors are also finding more value versus the US and the region has also seen a robust recovery in corporate earnings.
Turning to Latin American investing trends, Chilean pension funds pumped more than $320 million into European equities in April, turning it into the top gaining region in their foreign portfolio so far this year.
In this analysis we take a look at the three best performing managers in European equities to find out where they have been generating returns over the past five years.
Of the 447 European equities managers tracked by Citywire over this period, we’ve highlighted the three best performers. Over the five years ending in April 2017, the average manager returned 33.95%. The FTSE World Europe TR EUR returned 43.7% over the same period.
Below are the top three managers in this sector.
3. David Robinson, Dalton Strategic Partnership
Five-year return: 76.2%
David Robinson has been managing the $711 million Melchior European Opportunities fund for Dalton Strategic Partnership since its inception in May 2010. He uses a bottom-up stock selection process to find high quality players in niche markets to populate his concentrated portfolio of about 45 stocks.
Citywire AAA-rated Robinson’s top holdings include German pharmaceutical company Bayer and asset management giant Amundi.
Amundi actually was a leading contributor to the fund’s performance in April, according to Robinson’s latest commentary. In March, Robinson’s fund had participated in the capital raising to help finance Amundi’s acquisition of Pioneer from Unicredit.
2. Oliver Kelton, Odey Asset Management
Five-year returns: 79.9%
In second we have London-based Oliver Kelton, who has recently taken on a few additional mandates to his two funds after the veteran equity manager Feras Al Chaliba left Odey earlier this year. Kelton’s been with Odey since March 2015, and still manages a fund for his former employer Waverton on a sub-advisory basis.
His $640.3 million Odey European Focus fund, according to a factsheet for the end of March, was holding almost a third of its fund in cash. The fund’s largest regional allocation was put toward France at 26.3%, 13.67% invested in Germany and 12.45% in the UK.
1. Eva Fornadi, Comgest Asset Management
Five-year returns: 83.9%
At the top of our ranking is Eva Fornadi who has been managing the $250 million Comgest Growth Greater Europe Opportunities fund alongside Franz Weis since the inception of the fund in August 2009. She initially started at Comgest as an analyst in 2005.
Forandi selects European stocks that can bring ‘above-average’ earnings growth that are attractively valued. According to its April factsheet, the fund is majorly overweight information technology, as it allocates 34.5% to the sector in its portfolio, in contrast to the MSCI Europe index’s allocation of 4.4%.
Meanwhile she also has a strong underweight in financials. She has allocated 1.5% to the sector while the benchmark puts about a fifth of its assets into financials.
Forandi is also heavily betting on companies in Denmark. Copenhagen-based biotech company Genmab is within the fund's top five holdings.