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; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
News
i100

Other places that have held independence referendums
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
PROMOTED VIDEO
News
news

Arts and Entertainment
Blossoming love: Colin Firth as Stanley and Emma Stone as Sophie, in 'Magic in the Moonlight'
film

Actors star in Woody Allen's 'Magic in the Moonlight'

News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
News
peopleThe Times of India said actress should treat it as a 'compliment'
Arts and Entertainment
Jack Huston is the new Ben-Hur
film

It scooped up an unprecedented 11 Academy Awards when it was first remade in 1959

News
news

Watch this commuter wage a one-man war against the Circle Line
Property
Home body: Badger stays safe indoors
lifeShould we feel guilty about keeping cats inside?
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

Arts and Entertainment
Maxine Peake plays Hamlet at Manchester's Royal Exchange
theatreReview: Maxine Peake brings emotional ferocity to Shakespeare's starring part
Travel
travel

...and the perfect time to visit them

Sport
Jonas Gutierrez (r) competes with Yaya Toure (l)
football

Newcastle winger reveals he has testicular cancer - and is losing his trademark long hair as a result

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

    Trainee Recruitment Consultant Birmingham

    £18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Recruitment Consultant - Soho - IT, Pharma, Public Sector

    £20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

    Sales Executive

    £20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

    Day In a Page

    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    Exclusive extract from Janis Winehouse's poignant new memoir
    Is this the role to win Cumberbatch an Oscar?

    Is this the role to win Cumberbatch an Oscar?

    The Imitation Game, film review
    England and Roy Hodgson take a joint step towards redemption in Basel

    England and Hodgson take a joint step towards redemption

    Welbeck double puts England on the road to Euro 2016
    Relatives fight over Vivian Maier’s rare photos

    Relatives fight over Vivian Maier’s rare photos

    Pictures removed from public view as courts decide ownership
    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    Donatella Versace at New York Fashion Week