It has been just over a year since we launched Stockopedia’s Europe Edition in which time share prices at home and across the Continent have enjoyed some impressive gains. With around 8,000 stocks available, the introduction of Europe was a real boost for our Guru Screens, the 66 investment approaches inspired by the legends of finance. The broader geographic region offered scope to find a wider range of stocks qualifying for the strict criteria of these screens. For those investors prepared to do their homework and look abroad, it also offered a way of improving on the returns available in the UK stock market.

Since last May the FTSE Eurofirst 300 - an index of the largest stocks across developed Euro markets - has risen by 13%, while the FTSE 100 is up 2.7%. Elsewhere, small and mid cap stocks have done much better. The MSCI Europe Small Cap index is up 34% over one year, while the UK’s FTSE SmallCap XIT has risen 21.7%

Since European tracking started in May 2013, the aggregate performance of all Stockopedia’s Guru Screens screens - the Stockopedia Composite Long - has been 25.5%. In the UK, the Guru Composite achieved 22.4%.





Momentum leads European returns

Over the past year, quality and growth investing strategies have been highly successful both in Europe and the UK. But it was momentum that ultimately produced the best returns in Europe. Joseph Lakonishok’s value-inspired momentum strategy took top spot with a stunning 62% return from an approach that looks for cheap shares that are starting to catch the eye of investors. In recent months it has benefited from holdings like Slovenian port operator Luker Koper (LKPG) (up 62% during the second quarter of 2014) and French electronics group Actia (ATI) (up 46%).

But it wasn’t just rising prices that drove the performance of momentum strategies. Earnings momentum - where companies that are beating forecasts, surprising the market and being upgraded by brokers - was also a source of index-beating returns. The Bold Earnings Revisions screen has recorded a 53% return since we started tracking it in Europe. Hot on its heels was the Richard Driehaus-inspired momentum strategy which uses both price and earnings momentum in its search for buying candidates. It returned 51.7% during the year.

Quality and growth strategies impress

Among the successful growth and…

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