Mark Dampier: Time to get switched on to a winning European fund

The Analyst

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

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Suggested Topics
Arts and Entertainment
Chris Martin of Coldplay performs live for fans at Enmore Theatre on June 19, 2014 in Sydney, Australia. (Photo by Mark Metcalfe/Getty Images)
music
Sport
Dave Mackay lifts the FA Cup in 1967 having skippered Spurs to victory
football
Life and Style
Marie had fake ID, in the name of Johanna Koch, after she evaded capture by the Nazis in wartime Berlin
historyOne woman's secret life as a Jew in wartime Berlin
News
Jihadi John
newsMonikers like 'Jihadi John' make the grim sound glamorous
Arts and Entertainment
As depicted in Disney's Robin Hood, King John was cowardly, cruel, avaricious and incompetent
film
Life and Style
Travis Kalanick, the co-founder of Uber, is now worth $5.3bn
tech
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

    Ashdown Group: Trainee Consultant - Surrey / South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    SThree: HR Benefits Manager

    £40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

    Day In a Page

    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot
    Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

    Poldark star Heida Reed

    'I don't think a single bodice gets ripped'
    The difference between America and Israel? There isn’t one

    The difference between America and Israel? There isn’t one

    Netanyahu knows he can get away with anything in America, says Robert Fisk
    Families clubbing together to build their own affordable accommodation

    Do It Yourself approach to securing a new house

    Community land trusts marking a new trend for taking the initiative away from developers
    Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

    David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

    The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
    With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

    Money, corruption and drugs

    The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
    America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

    150 years after it was outlawed...

    ... America's first slavery museum is established in Louisiana
    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
    Tony Oursler on exploring our uneasy relationship with technology with his new show

    You won't believe your eyes

    Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
    Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

    Moores must go. He should never have been brought back to fail again

    The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
    War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

    The battle for Mosul will unleash 'a million refugees'

    Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn