Mark Dampier: Time to get switched on to a winning European fund
Saturday 08 May 2010
Given the problems we are seeing in Greece at the moment you might be forgiven for thinking I have lost my mind in suggesting a European fund. Still, I hope the one thing my column does show is that there is more to fund selection than looking at a name. Jupiter European is a case in point. The manager, Alex Darwall, is in my view one of the most underrated in the country.
He is not one for long discussions about the outlook for Europe and dismisses the relevance of Greece, which represents less than 2 per cent of the European economy and 1 per cent of the European stock markets. He is also of the view (rightly in my opinion) that the geographical location of larger companies in Europe is, for the most part, irrelevant. Today's globalised economy means that firms operate across borders in Europe, and often all over the world. This fund is therefore a far more global one than its European tag suggests.
As part of Mr Darwall's investment process he looks to identify long-term structural growth themes such as the rise in obesity, or the increase in demand for agricultural technology from climate change. He focuses his attention on getting to know companies inside out, and attempts to buy shares where he sees an asymmetric relationship between risk and reward. In other words where he believes there is little downside risk and a great deal of upside potential. This tends to result in a concentrated portfolio of what he calls "global winners" whose activities are truly international rather than simply being on the European stage. Europe has plenty of such opportunities, even though you might expect it to have very few given the unpopularity of the sector with investors.
Mr Darwall is very much an investor rather than a speculator, and some of his fund's holdings have remained in place for quite some time. His largest holding, Novozymes, is a world leader in enzymes, with around 50 per cent market share and profit growth of 8 per cent a year for the past 30 years. It has many attributes you want to see in a company; high barriers to entry, strong growth potential and robust sales worldwide. Another holding, Novo Nordisk, specialises in treatment for diabetes, a condition growing at more than 10 per cent per annum, clearly a strong structural theme. A further example is Aixtron, a manufacturer of equipment for producing light-emitting diodes. Some 78 per cent of the business is in Asia and if you have a Samsung TV it is almost certain this company was involved in making the backlighting. The use of LEDs is expanding into other areas too, such as car brake lights and street lighting in places like China. Yet LED penetration has not even really started in the consumer market so there is plenty more to come from this theme.
As part of his research Mr Darwall meets over 150 companies a year. With Jupiter a key investor for many companies, he has the opportunity to find out what really makes a company tick, examine the competition and consider the whole supply chain. While many investors think Europe is a quiet backwater of the investment world (and emerging markets like China are the place to be) they miss the fact that Europe is home to many world class companies.
Will the Greek problems derail the companies that I mentioned? I don't think so. Indeed one advantage arising from the Greek problems is a falling euro, which makes European exports more competitive. Consequently, if you understand the effects of globalisation you realise the significance of a company's location is becoming smaller and smaller. Far more important is appreciating the structural changes in the world economy today and focussing on the companies in the strongest positions to take advantage of them. In this regard you have a champion in Alex Darwall.
Mark Dampier is head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more details about the funds included in this column, visit www.h-l.co.uk/independent
How much lower will mortgage rates go?
Money Insider: Peer-to-peer lenders come into their own as marketplace lending evolves
10 tips for taking out a personal loan
Has your Premium Bond won the £1million jackpot?
There are 'dark corners' of the investment and pensions industry, says Pension Minister
- 1 Raif Badawi, the Saudi Arabian blogger sentenced to 1,000 lashes, may now face death penalty
- 2 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 Spiritual leader allegedly manipulated 400 men into removing testicles to be 'closer to God'
New theory could prove how life began and disprove God
End of the licence fee: BBC to back radical overhaul of how it is funded
This is what it's like to be dead, according to a guy who died for a bit
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
iJobs Money & Business
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...
£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
Day In a Page
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads