J O Hambro Capital Management has unveiled the JOHCM European fund and has renamed its existing fund of that name the JOHCM continental European fund.
The new European fund differs from the previous fund in that it invests in Europe including the UK. Both funds are run by the same fund manager, Rod Marsden. Marsden joined J O Hambro in September 2001 after previously working at Sanwa Asset Management - first as an associate director, then as head of Pan-European equities. He managed the Sanwa European growth unit trust and had previously managed equity portfolios at Municipal Mutual Insurance.
The European fund will invest in a portfolio of between 50 and 70 European blue chips and mid caps, although Marsden does have the discretion to hold a small number of small caps. He will use a combination of top down and bottom up approaches when selecting stocks and the FTSE Eurotop 300 will be used as a benchmark.
Top-down analysis of sectors will focus on factors such as earnings growth potential and valuations, while the bottom-up process identifies factors within each company that will lead to earnings growth.
European markets including the UK have rallied in recent weeks, with financial stocks bouncing back in the UK and Germany. The outlook appears better for large and mid-caps than small caps, so this fund is ideally placed to benefit if the rally gathers momentum. However, the problem for many funds is how to attract investors back into the market, as it is difficult to produce the expected returns.
According to Standard & Poor's JOHCM continental European fund and JOHCM UK growth are ranked first quartile and JOHCM UK recovery is ranked fourth quartile based on £1,000 invested on a bid-to-bid basis with gross income reinvested over one year to May 5, 2003.