Three fund houses have launched Europe focused funds.
Attractive valuation, prospects of a healthy GDP growth and reviving macro-economic sentiments in many European countries has led AMCs to float overseas fund of funds with a focus on European market.
Three fund houses – DWS, JP Morgan and Religare Invesco have launched their overseas fund of funds which predominantly invest in the European market. Reportedly, Franklin Templeton is also considering launching a Europe focused fund.
A similar trend was witnessed recently when ICICI Prudential, JP Morgan and PineBridge had launched fund of funds which primarily invested in the US market.
JP Morgan - Europe Dynamic Equity Offshore Fund will open for subscription on January 17 and closes on January 31. Its master fund - Europe Dynamic Fund invests primarily in an aggressive managed portfolio of European companies. The fund is benchmarked against MSCI Europe Index and currently managing around $824.4 million. The scheme has outperformed its benchmark since its 1 year, 3 years and 5 years returns are 57%, 29% and 22% against 41%, 24% and 19% of its benchmark respectively in terms of INR whereas in Euro terms the fund has delivered a return of 33.89% in 2013 against 19.82% of its benchmark, said the fund house. Since inception, it has delivered a return of 9.82% in Euro terms against 6.35% return by its benchmark. The fund has an exposure to companies like British Petroleum, British Telecom, Roche, Vodafone and Capgemini.
Last week, DWS launched DWS Top Euroland Offshore Fund benchmarked against EURO STOXX 50. The scheme has outperformed its benchmark for past couple of years. Last year, it has delivered 49% returns compared to 42% of its benchmark in terms of INR. Euroland fund currently manages close to Euro 1 billion in assets. The NFO opens on January 9.
Similarly, Religare Invesco Pan European Equity Fund will primarily invest in the units of Invesco Pan European Equity Fund, which manages about Eur2.23 billion. The scheme has delivered a return of 34.30% in Euro terms against 19.82% of its benchmark in 2013. In past three years ended November 2013, the scheme has generated an alpha of 4.55% in Euro terms. Its top five holding consists of Novartis AG, Roche, BP, BT and Rio Tinto. The scheme will offer for subscription from today and closes on January 29.
Nand Kumar Surti, CEO, JP Morgan Asset Management, said growth prospects of global market like Europe, US etc. are much better than emerging market. He informed that European market has delivered a return of 25% in 2013 and has a comparatively low volatility.
Anis Lahlou, Portfolio Manager, JPMAM said that the stocks in European market are trading at very low valuation and available at bargain price. “Most of the good companies in European market are trading at its historically low valuations. It’s a good time to invest in European funds since from now onwards, these companies are poised to grow due to increasing consumer sentiments and strong macro-economic outlook of European countries.”
Fabain Frankenberg, Senior Product Specialist, DWS had earlier told Cafemutual that it is a perfect time to invest in European funds as there is a strong improvement in macro-economic data and uptick in Eurozone manufacturing Purchasing Managers Index (PMIs).
