Hambidge cuts Premier’s equities in Europe

Premier Asset Management’s David Hambidge has cut back on European equity holdings in his multi-asset income funds following strong performance from the region’s stockmarkets.

The manager now has just 2 per cent of his £223.6m Premier Multi-Asset Distribution fund invested in European equities, through a holding in the IM Argonaut European Income fund, managed by Oliver Russ.

In Mr Hambidge’s £54.1m Multi-Asset Monthly Income fund he has 3.8 per cent in Europe, according to the fund’s September 30 factsheet.

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“We’ve taken profits from Europe as we’ve had a good run,” Mr Hambidge said. “Europe was very good value 15 months ago but since then it has had miserable earnings and a massive re-rating of stocks.

“The market was trading on a price-to-earnings ratio of 10x, but now it is nearer 18x-20x. Last year it was all about the earnings recovery in Europe, but now the case is not as compelling.”

Europe’s stockmarkets have performed strongly in the past 12 months driven in particular by strong corporate performance from Germany. However, Spanish companies have also posted strong returns, with the MSCI Spain index gaining 30.4 per cent in the 12 months to November 15.

Mr Hambidge has been using the money raised from selling down European holdings to add positions in Asia and emerging markets, saying the areas were “hopefully fairly close to the bottom”.

The Multi-Asset Distribution fund ranked in the top 10 of the IMA Mixed Investment 20-60% Shares sector in one-, three- and five-year periods to November 15, as did the Multi-Asset Monthly Income fund – launched in January 2009.