‘Too soon to be bullish’: Aberdeen’s Thomson

Mr Thomson, senior investment manager on the pan-European equities team at Aberdeen, said there is “not going to be complete financial Armageddon” because the European Central Bank’s (ECB) policy measures in December had acted as a “major boost to equity markets”.

But he said there was “still a lot to sort out” in the debt burdened eurozone and warned there was still “far too much leverage in countries”.

The manager said that while his team is not averse to banks as a whole, they “can’t find enough banks that are good enough quality and exposed to growing economies” to invest in in Europe.

He said the team does have exposure to UK bank Standard Chartered because it is focused on growth in Asia.

Mr Thomson said January’s eurozone bank bounceback was “understandable” but he warned banks were “coming back to normality” rather than taking off on a bull run.

“This month has been very strange, and I’m not sure how long it will last,” he said.

Mr Thomson said he remained underweight in financials, but was overweight in industrials, though he was not buying “high beater cyclicals” because there was still too much uncertainty in the markets.

Both the £187.5m Aberdeen European Equity fund and the £19.5m Global European Equity fund have delivered top-quartile returns over the one and three year periods, returning 34.5 per cent and 36.6 per cent respectively over the three year term to January 20, compared with an IMA Europe excluding UK sector average of 26.4 per cent, according to Morningstar.

However, the funds are bottom-quartile over the longer term, ranking 66 and 64 out of 85 portfolios in the sector over five years.