The break-up of the single currency is assured according to OPM Fund Management's Tony Yousefian (pictured) but he still believes there opportunities to be found in Europe and highlights the funds he believes can exploit them.
‘We see at least one country leaving the single currency as inevitable and it’s got to be Greece…But that does not change the story for equity prices and valuations. Europe is still an export driven economy so the weaker the Euro, the better it is for the region and European stocks generally,’ said Yousefian, who serves as CIO at OPM.
He pointed out the liquidity injected by the European Central Bank (ECB), in the form of over €1 trillion (£832.2 billion) in cheap three-year loans, was designed to protect the continent’s banking system rather than save the fiscal union.
‘With the long-term refinancing operation (LTRO), policymakers have bought themselves some time so banks can deleverage massively of Greek debt…The pain felt so far by the Greek austerity measures is just the beginning and the only way forward for them is to have an orderly exit,’ he said
Yousefian runs a number of multi-manager funds and last May launched the OPM Worldwide Opportunities fund, which has returned 11.07% over the last three months versus the MSCI World index’s return of 8.52% over the same period.
As an example of how to play the European debt crisis, he highlighted Old Mutual’s European Equity fund because of manager Kevin Lilley’s showed conviction in his holdings and refused panic during last year's turbulence.
The Old Mutual fund has a 21.37% exposure to financials including a 2.75% allocation to BNP Paribas and Lilley, who has a Citywire AA rating, has steered the fund to a 57.96% return over three years compared to the MSCI Europe ex UK’s yield of 52.72%.
Another fund Yousefian recommended was the Artemis European Opportunities, run by Mark Page and Laurent Millet, which has returned 13.54% over three months compared to the MSCI Europe ex UK total return of 8.34% over the same period.