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How Premier's Hambidge exploited Europe to outwit the benchmark
by Annabelle Williams on Dec 17, 2012 at 10:34
While many investors have shied away from Europe, Premier’s David Hambidge has seen success from funds tapping the region’s smaller companies market.
Hambidge, who co-manages the Premier Multi-Asset Growth fund alongside Ian Rees and Simon Evan-Cook, points out that while valuations across European markets are very low, some of ‘nuggets’ of good news are in the region’s smaller companies space.
‘If you don’t like Europe you’re definitely not going to be buying European smaller companies and actually that’s where some of the nuggets are. We love smaller companies,’ he said.
He singled out the Threadneedle European Smaller Companies as one he likes in that space.
‘It’s got the best team, it’s a very small team, pan-European and very off-piste,’ he explained.
The fund has been run by Citywire Selection David Dudding and its stellar performance has helped power the Premier Multi-Asset Growth fund to a 16.43% return this year, compared to 8.76% in the LCI UK Balanced & International Equity benchmark.
Since the fund range offered in the European Smaller Companies sector is still small, Hambidge describes most of his European holdings as ‘conventional’, and points to Citywire AAA-rated Alistair Hibbert’s BlackRock European funds as a good call this year.
Hambidge sold out of the Schroder European Alpha Plus ‘as a happy investor’ owing to slight capacity issues and instead bought in to the Baillie Gifford European fund which Hambidge describes as ‘below most investors’ radars’.
‘We have had a decent exposure to Europe for the 12 months or so and for value investors that can be a bit frustrating. I’d suggest that part of that value has now been realised, really since Draghi came and underpinned the market through bond purchases,’ he said.
‘We prefer Europe as a place to invest as buyer of funds rather than direct equities,’ he explained. ‘We believe it is far easier to outperform in a less efficient market than a more efficient market. Europe is made up of all those different cultures and the ability of a manager to add value is much greater than with the US which is really over-analysed.’
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