Premier Asset Management’s global equity manager Jake Robbins has pared back his European exposure and remains unconvinced by the continent’s recovery.
The manager of the Premier Global Alpha Growth fund has reduced his European holdings from around 20 per cent to 15 per cent of the portfolio.
“I worry that Europe will disappoint. I feel there is too much weight being placed on its recovery,” Mr Robbins said.
While the embattled eurozone economy expanded 0.3 per cent in the final three months of 2013, up from 0.1 per cent growth the previous quarter, Mr Robbins highlighted December’s weak industrial production figures in the region that fell back 0.7 per cent, significantly lower than the consensus estimate of 0.3 per cent.
Instead, Mr Robbins believes emerging markets, and especially China, are still very attractive in spite of recent turmoil.
He said: “The Chinese market is the cheapest it has ever been and while growth may be slowing, there is still a wealth of great companies housed there.”
He highlighted China Lesso, the largest water pipe manufacturer in the country and one of his top-10 plays.
“The theme of growing urbanisation in China means the government needs to bring more water to its cities. If you persevere with that kind of business, you can make money in the long term,” the manager said.
Mr Robbins is also backing Truly International, which manufactures and sells liquid crystal display products to China’s domestic smartphone market, where it derives 80 per cent of its revenues.
Elsewhere the manager has backed Indian conglomerate Tata, which is the country’s largest carmaker. The parent company of Jaguar Land Rover – which it snapped up from Ford in 2008 – is showing “phenomenal growth”, he said.
While he has no holdings in Latin America, almost a third of Mr Robbins’ assets are spread across emerging markets and Asia, although his largest weighting is still to the US.
He says: “We will always have a decent weighting to the US as there are a lot of great cash-generative companies out there.”
Mr Robbins will mark his third anniversary as manager of the Premier Global Alpha Growth fund in November this year, and has just seen his assets under management surge considerably from £18m to £75m. This follows the merger with the Premier Global Strategic Growth fund, which he used to co-manage with the group’s former chief investment officer Mike Jennings.
In the past 12 months to February 14 the Global Alpha Growth fund has returned 5 per cent, underperforming the IMA Global sector average of 8 per cent for the period, according to FE Analytics. In three years it has matched its peer group’s 17 per cent gain.