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By Jenny Lowe | Published Sep 27, 2012

Howard-Spink: Best time to buy Europe in a generation

Cheap European equity market valuations make now the best time to buy in a generation, Schroders’ Leon Howard-Spink has said.

“Probably the most important determinant of long-term returns from equities is the valuation at the time you invest,” he said.

“So, in this respect, it is a better time to be buying European equities than almost any other time in a generation. This is not the case for all equity markets, but it is true for Europe.”

In an investment update seen exclusively by Investment Adviser, the manager of the £686.3m Schroder European Alpha Plus fund said that the market hangs on “regional as well as global monetary policy” and is therefore not making any “meaningful direction call”.

He added: “The market tends to reward different ‘flavours’ of investment at different times: value or growth; defensive or cyclical; emerging markets or mature markets; large caps or small caps; or, more simply in recent years, risk on or risk off.

“We will stay broadly diversified, within the context of our stated biases, and try and let the companies in the portfolio do the hard work for us and drive relative outperformance.”

Mr Howard-Spink took over the fund in January 2005 and since then has returned 53.5 per cent, outperforming its FTSE World Europe ex-UK benchmark by 19.56 percentage points to September. The IMA Europe ex-UK sector has returned 28.03 per cent over the same period.

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