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

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

Suggested Topics
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Talent Acquisition Consultant

    £22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

    Recruitment Genius: Experienced Financial Advisers and Paraplanners

    Negotiable: Recruitment Genius: This extremely successful and well-established...

    Guru Careers: FX Trader / Risk Manager

    Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

    Guru Careers: Investment Writer / Stock Picker

    Competitive (Freelance) : Guru Careers: An Investment Writer / Stock Picker is...

    Day In a Page

    How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

    How to stop an asteroid hitting Earth

    Would people cooperate to face a global peril?
    Just one day to find €1.6bn: Greece edges nearer euro exit

    One day to find €1.6bn

    Greece is edging inexorably towards an exit from the euro
    New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

    'Iron Man' augmented reality technology could become reality

    Holographic projections would provide extra information on objects in a person's visual field in real time
    Sugary drinks 'are killing 184,000 adults around the world every year'

    Sugary drinks are killing 184,000 adults around the world every year

    The drinks that should be eliminated from people's diets
    Pride of Place: Historians map out untold LGBT histories of locations throughout UK

    Historians map out untold LGBT histories

    Public are being asked to help improve the map
    Lionel, Patti, Burt and The Who rock Glasto

    Lionel, Patti, Burt and The Who rock Glasto

    This was the year of 24-carat Golden Oldies
    Paris Fashion Week

    Paris Fashion Week

    Thom Browne's scarecrows offer a rare beacon in commercial offerings
    A year of the caliphate:

    Isis, a year of the caliphate

    Who can defeat the so-called 'Islamic State' – and how?
    Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

    Marks and Spencer

    Can a new team of designers put the spark back into the high-street brand?
    'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

    'We haven't invaded France'

    Italy's Prime Minister 'reclaims' Europe's highest peak
    Isis in Kobani: Why we ignore the worst of the massacres

    Why do we ignore the worst of the massacres?

    The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
    7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

    Remembering 7/7 ten years on

    Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
    Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

    They’re here to help

    We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?
    Time to lay these myths about the Deep South to rest

    Time to lay these myths about the Deep South to rest

    'Heritage' is a loaded word in the Dixie, but the Charleston killings show how dangerous it is to cling to a deadly past, says Rupert Cornwell
    What exactly does 'one' mean? Court of Appeal passes judgement on thorny mathematical issue

    What exactly does 'one' mean?

    Court of Appeal passes judgement on thorny mathematical issue