EquitiesFeb 12 2014

Peripheral Europe bets start to pay off for equity funds

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Mr Norris said he and his team had been investing in Greek banks “for many months” adding that Europe’s banking sector was set to drive earnings growth on the Continent this year.

“The best time to invest in a country is often when its economy is emerging from recession and all of the bad news is in the rear-view mirror,” he said.

“We have previously highlighted the European banking sector as the most obvious stockmarket beneficiary from a European economic recovery. It should therefore come as no surprise that the Greek banks are the most geared equity investments to the ‘Grecovery’. “In our opinion, they offer, some compelling investment opportunities.”

Henderson Global Investors’ European manager John Bennett also recently invested in a Greek bank and is overweight European banks for the first time in roughly seven years.

Nick Williams’ £1bn Baring Europe Select Trust fund has benefited from punchy weightings in Italy – now at 9.7 per cent – and Ireland, currently at 4.4 per cent, according to the fund’s latest factsheet.

Investment Adviser revealed in December that three European equity managers – Jupiter’s Alexander Darwall, Threadneedle’s David Dudding and Schroders’ Leon Howard-Spink – had fallen to the bottom of their IMA Europe ex UK sector in the 12-month period, due to their focus on ‘quality growth’.