The fund will aim for above average returns by investing in higher growth stocks, for example, under-researched mid-caps and stocks within countries on the periphery of Europe. It will not be constrained by a benchmark index in terms of sector, country or size.
The fund will be managed by Argonaut Capitals Barry Norris and Oliver Russ, who previously worked together at Neptune Asset management. Norris has eight years experience of investing in European equities. He joined Neptune in 2002 as head of European equities, where he ran the European opportunities fund. Russ joined Neptune in 2004 as a fund manager and financial analyst. He spent the previous four years working with other members of the Neptune team at Oribitex.
The Britannic fund will use the same investment approach used at Neptune. The portfolio will contain their best ideas, but as soon as a new stock is bought the least good stock in the portfolio will be sold.
When selecting stocks, Norris and Russ will screen around 800 stocks which will be ranked according to attractiveness. The stockpicking process also involves company analysis and identifying factors that drive share prices.
According to Britannic, Europe is attractive in terms of valuation relative to other regions. It believes the addition of new EU member states last year has increased scope for investment. Emerging European countries such as Spain and Portugal are also viewed as worth considering because they are starting to prosper. But the pace of economic growth is uncertain and the strength of the euro against the dollar has affected companies ability to complete in export markets and against foreign companies in their home markets.