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Julian Gibbs – March 15th, 2001

The Budget was really very boring for investors except for those with shares in bookmakers. So where will investors find best value at the present time?

I believe, along with the majority of leading fund managers, that Europe is the best answer for three main reasons. First, many shares are under-researched and often undervalued. There is particularly good value in some of the mid-caps. Second, there is a large amount of merger and acquisition activity and, third, it looks likely that the profits of some companies will surprise on the upside.

Furthermore, the euro looks likely to recover against sterling, which will give UK investors currency gains as well. The downside is that the soft landing in the

US will probably affect some exporters.

Generally speaking,

I prefer smaller funds because they can be more flexible and do not have to invest in the mega-companies, most of which I believe are unlikely to outperform. One of the smaller trusts

I like best is Premier European growth, managed by the team at BNP Paribas. They have an excellent record since the fund was launched in 1997.

It is more conservatively managed and lower risk than most European funds, in that it only invests in the major stockmarkets and large-cap and mid-cap companies.

At the other end of the risk spectrum, Henderson European smaller companies is another fund which looks likely to continue to outperform.

There are also two big funds I like particularly. Fidelity European is managed by Anthony Bolton, who I believe is probably the best European fund manager of all. Second is Threadneedle European select growth, which is AAA rated by S&P Fund Research. Fund manager Darrell O&#39Dea

is highly successful.

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