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Sym to 'totally revamp' Howard-Spink's Schroder European fund
by Eleanor Lawrie on May 15, 2014 at 10:45
The fund will be similar in outlook to his European Alpha Income fund, Sym explained, but without the constraints of the income requirement. This means he can own more of stocks he likes which do not necessarily pay a dividend.
It will also follow the European Alpha Income fund by having around 70% large cap, 25% mid cap and 5% small cap. This contrasts to its current positioning, which is mainly large cap.
While Sym said he is 'agnostic' about where the best ideas come from, he still thinks there are opportunities in the periphery, particularly Italy.
'Eighteen months ago it was Spain, now it's Italy. Italy has not done all these moves to do with competitiveness that Spain has done and has a new PM who is making some pretty positive noises. In addition there is a lot of value,' he said.
Sym favours large cap Italian banks, some of which are trading at less than book value. However, he argued Greek banks look 'outright expensive' with their widespread consolidations priced in.
'At this moment in the business cycle I feel like financials are the right place to be,' he added.
'The hangover of the credit crunch is having a big impact on the valuations of these businesses. I don't think the investor community is prepared to believe they can outperform.'
The Alpha Income fund is overweight financials with 32.1% compared with 23.8% for the benchmark FTSE World Series Europe ex UK. When Sym took on the Alpha Plus fund it was underweight, with 17.3% in the sector compared with 23.8% for the same benchmark.
While Europe is not as cheap as it was, Sym believes there is still great value in the region if you are selective.
'It's not as cheap as it was because no one thinks the eurozone is going to break up. Although the market has moved up a long way, it's for the perfectly legitimate reason that the risks have diminished,' Sym said.
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