The fund is a focused list of equities invested in the Pan European area, so it includes the UK. It does not invest in developing markets, sticking instead to developed markets in Europe. It is predominantly mid- to large-cap companies - we will not invest in a company with a market cap of less than €2 billion - and we are limited to 60 positions. What I am looking for in those companies is consistency, reliability and good, long-term quality growth.
What differentiates the fund?
The fund is different because of the way that we have consistently focused, since we launched the fund in 2001, on good quality consistent, reliable companies that can increase the return to us as shareholders. You have to have a degree of patience when investing in these businesses. Put simply, we are just trying to find really good companies - of which there are a lot in Europe - and participate in their future.
Opportunities in European equities?
The current opportunities in the portfolio revolve around the comparison between the valuations on European equities compared with European bonds. In our view, European bonds look over-valued at the moment. Relative to that, European equities certainly do look attractive. Over the medium term, however, there are political risks in Europe, indeed political risks worldwide. Politics has an irritating habit of getting in the way, as we've seen in the UK with Brexit. We need to be aware of that. Above all, over the long term, we have to accept that we are in a world of low growth. So if you can eke out something like a 10% total return, then that may turn out to be a very good long-term investment.