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Top 5/Bottom 5: European small caps

Top 5/Bottom 5: European small caps

European markets are going through a phase of uncertainty with the fear of Greece leaving the eurozone and its impact on returns for investors. Today, we look at the best and worst performing funds in the European Smaller Companies sector on the basis of their returns.

A total of 19 funds sit within this space in the Investment Association (IA). The IA stipulates funds in this sector should invest at least 80 per cent of their assets in European equities of companies which form the bottom 20 per cent by market capitalisation in the European market. These funds may also include UK equities, but these must not exceed 80 per cent of the fund’s assets.

The top performing fund in this sector is Carmignac Euro Entrepreneurs with a return of £1,264 on an initial investment of £1,000 over a one-year period to 20 July, according to FE. The £26.4m fund aims to outperform its reference indicator over a period exceeding five years. It invests heavily in European equities but also has exposure in international equities, particularly in Middle East and African equities. The fund’s highest investment is in the financials sector with 18.99 per cent allocated to this sector, followed by 15.6 per cent in healthcare.

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The second in the list is Lazard European Smaller Companies fund that has a return of £1,211. With a fund size of £215.8m, it aims to achieve capital growth by investing in shares of European companies that are at the smaller end of the capitalisation spectrum. The fund invests majority of its assets in UK equities, with 42.3 per cent allocated to this area, followerd by 15.3 per cent in German equities and the remaining 40.4 per cent in other regions.

Standard Life Investments Ignis European Smaller Companies is today’s worst performing fund, although it still returned £1,050 on an initial investment of £1,000 over a one-year period. The fund aims to achieve capital growth through investing primarily in the equity of smaller companies domiciled in Europe, exluding UK. In terms of asset allocation, the fund has 30.4 per cent in German equities, 18.1 per cent in French equities and 51 per cent in other regions that are not specified.

The second fund in this list is Aberdeen European Smaller Companies with a return of £1,057. The £99.7m fund aims to grow capital by investing in European companies valued at less than €5bn (£3.4bn) at the time of investment. It is heavyweight on UK equities with 41.9 per cent allocated to this space, followed by 18.6 per cent in German equities. In terms of its holdings, the fund has 38.5 per cent invested in the industrials sector, followed by 16.3 per cent in consumer goods.

It is worth noting that all the funds in the top five and bottom five category returned on their initial investments.

Best And Worst European Smaller Companies Funds, One Year To 20 July 2015
Top Five
Carmignac Euro Entrepreneurs£1,264
Lazard European Smaller Companoes£1,211
Pioneer European Potential Non-Distributing£1,184
Threadneedle Pan European Smaller Companies£1,163
MFA Meridian European Smaller Companies£1,162
Bottom Five
T. Rowe Price European Smaller Companies Equity£1,096
M&G European Smaller Companies£1,076
Invesco Perpetual European Smaller Companies£1,074
Aberdeen European Smaller Companies Equity £1,057
Standard Life Investments Ignis European Smaller Companies£1,050
Figures as of 20 July 2015. Source: FE