Premier Asset Management’s multi-asset team has no intention of reducing its multi-asset growth fund’s exposure to European equities as the region’s political crisis trundles on.
The company says the crisis, which has resulted from sovereign debt problems in the eurozone, has caused share prices to fall to attractive levels.
It believes investments in high quality European firms represent good value in the long term, even though European exposure has been a drag on recent performance.
Due to its contrarian investment style, where profits are taken from areas that have performed well and reinvested in weaker areas, Premier’s multi-asset team prefers to avoid crowded sectors and invest in funds and asset classes that are less popular among investors.
The team is investing in European firms on a bottom-up basis, where companies are assessed on their individual merits, and says it would expect the region to be a very strong area when markets are pricing in a recession.
The euro currency is a different matter for the team, so it has hedged most of its exposure to the currency.
Premier is also investing in Japan within the multi-asset growth fund for similar reasons to Europe. Valuations are attractive but many investors have neglected the region.
Premier points out that highprofile investors such as Warren Buffett are now talking about Japan and says it is happy to maintain its hedging of yen exposure back to sterling, which has not been helpful in recent months.
Investment director of pooled funds David Hambidge says there is a bucket of value in multi-asset growth at the sector level and in terms of the underlying growth.
He says: “If we can deliver equity returns with less volatility, that should be attractive to longer-term investors.”