The Analyst: This is no time to be a Eurosceptic

Success breeds success. The market leaders in a particular industry are better able to attract world-class talent, which in turn strengthens their positions as experts. In the investment world, Jupiter is a prime example.

Under the stewardship of Edward Bonham Carter, the group has gone from strength to strength. Like bees around a honeypot, it attracts high-quality fund managers, but it also brings on the talent within the organisation.

Jupiter is extremely well known for its UK funds, especially the Jupiter Income Trust, and of course for Eastern Europe. It has been growing its Asian team, too, and I would not be surprised to see Jupiter launch more funds investing in this region in the future. Clearly, emerging markets have been the flavour of the year – I remain optimistic on them – but I think investors should be careful not to ignore other opportunities.

Europe has long been a backwater for UK investors, despite its history of strong performance and talented fund managers. Perhaps the reason is because we tend to view Europe as a bureaucratic nightmare held back by left-wing politicians who are 50 years behind the times. However, Europe is nevertheless home to many world-class companies that have prospered despite the politics.

The Continent is a highly competitive space for fund managers, and it is easy for quality offerings to be lost in the crowd. One fund which I believe has been overlooked is the Jupiter European Fund.

To be fair, the last couple of years have seen the fund struggle. The fund manager is Alex Darwall, who took it over at the beginning of 2001, and he is very much his own man. He stuck by his principles and didn't buy into the credit bull-market, which saw the share prices of low-quality assets soar compared to the high-quality ones. The fund's performance relative to its peer group suffered as a result.

Mr Darwall's portfolio tends to contain companies with strong balance sheets, low levels of debt and an international outlook. Indeed, this fund is a great example of globalisation in action. Mr Darwall favours companies with unique products or services that are able to trade in a global marketplace. This, of course, means that they are less affected by local issues in their own economies.

Banks and property companies don't usually fall into this category, so the Jupiter European portfolio is not particularly exposed to these areas, which have seen so much turmoil this year.

When I met him, Alex Darwall pointed out that Europe hasn't experienced the same rampant credit bubble that we have seen in the UK and US, and so shouldn't suffer the same scale of problems we have seen here.

He doesn't typically worry too much about the overall economic outlook. In his opinion, market analysts have spent too much time wringing their hands about a consumer slowdown in the US and have missed what is happening in emerging markets, particularly the BRIC economies (Brazil, Russia, India, China). He prefers companies pointing more towards this direction.

The themes in the Jupiter European portfolio revolve around energy, the environment, media and pharmaceuticals. Energy is in ever greater demand due to the industrialisation of emerging markets, and Mr Darwall believes the area to look at is oil services. One of his largest holdings is Cie Gen Geophysique, which is involved in exploring for oil through seismic testing. The share price has been weak recently because the company is doing its own drilling rather than hiring out its expertise to another firm.

Another holding in the fund is Novozymes, a world leader in environmental enzymes. Examples include enzymes that will allow us to wash clothes in cold water (thereby saving energy), and enzymes for pig food that means the pigs retain more of the food they eat.

The 10 largest positions in the portfolio make up a large chunk of the fund – 61 per cent – reflecting the manager's conviction about the long-term potential of the companies. Mr Darwall is a classic "buy and hold" investor, believing that if you can find quality companies, share price growth will eventually follow.

The Jupiter European Fund is a high-quality portfolio, which is as much invested in Europe as it is in the major global themes. While the fund has had a difficult time, I believe this is the type of portfolio that will prosper in the more difficult economic conditions we're likely to see over the next two or three years.

Mark Dampier is the head of research at Hargreaves Lansdown, the asset manager, financial adviser and stockbroker. For more information 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

PROMOTED VIDEO
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

    Selby Jennings: Oil Operations

    Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

    The Jenrick Group: Night Shift Operations Manager

    £43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

    SThree: Trainee Recruitment Consultant - LONDON

    £20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

    Day In a Page

    Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

    'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

    Yazidi girls killing themselves to escape rape and imprisonment
    Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

    Ed Balls interview

    'If I think about the deficit when I'm playing the piano, it all goes wrong'
    He's behind you, dude!

    US stars in UK panto

    From David Hasselhoff to Jerry Hall
    Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

    Grace Dent's Christmas Quiz

    What are you – a festive curmudgeon or top of the tree?
    Nasa planning to build cloud cities in airships above Venus

    Nasa planning to build cloud cities in airships above Venus

    Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
    Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

    Clocks, rifles, swords, frogmen’s uniforms

    Surrounded by high-rise flats is a little house filled with Lebanon’s history
    Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

    Four months after the bombardment, Gaza’s wounds are yet to heal

    Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
    Gastric surgery: Is it really the answer to the UK's obesity epidemic?

    Is gastric surgery really the answer to the UK's obesity epidemic?

    Critics argue that it’s crazy to operate on healthy people just to stop them eating
    Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

    Homeless Veterans appeal: Christmas charity auction

    Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
    Pantomime rings the changes to welcome autistic theatre-goers

    Autism-friendly theatre

    Pantomime leads the pack in quest to welcome all
    The week Hollywood got scared and had to grow up a bit

    The week Hollywood got scared and had to grow up a bit

    Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

    Panto dames: before and after

    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
    Thirties murder mystery novel is surprise runaway Christmas hit

    Thirties murder mystery novel is surprise runaway Christmas hit

    Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
    Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

    Anne-Marie Huby: 'Charities deserve the best'

    Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
    The botanist who hunts for giant trees at Kew Gardens

    The man who hunts giants

    A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there