Overview
Europe has been one of the top-performer for the year, on the back of record high earnings supported by high vaccination numbers and strong earnings growth. Further, the EU Recovery package supporting the region’s transition to clean energy bolsters its growth outlook.
Despite rising costs from supply chain disruptions and expected tapering of government support, our CIO view remains positive on the region given its fair valuations and high dividend yields.
Thus, we recommend investing through a diversified fund that practices discipline in capturing the best of Europe by combining both income and growth opportunities.
So, what would be one of our highest conviction funds for a diversified exposure to Europe?
BGF European Equity Income
What are the key characteristics of this fund?
- Bottom-up, high-conviction portfolio of 40 to 60 quality European companies with sustainable and growing dividends.
- Balanced Income and Growth approach, dynamically allocating to three types of stocks: High Income (c.50%), Resilient (20-30%) and Structural Growth (20-30%) companies.
- Focuses on resilient companies with cash-heavy balance sheets and avoid companies with increased risk of dividend cuts.
Why this fund?
- Large & experienced team: Co-managed by Andres Zoellinger and Brain Hall, both with over 20 years of experience, the PM is team is supported by one of the most well-resourced research team of 18 fundamental equity analysts.
- Strong risk-reward profile: The fund demonstrates a lower volatility profile when compared to peers and the market due to the strong awareness on risk management and capital preservation.
- Sustainable Income with growth: Since inception in 2010, the fund has maintained an average dividend yield premium of c.48% compared to the broader market index (MSCI Europe) while outperforming it by c.110bps on an annualized basis.
