What do people think of Europe as an Investment? It appears that the European Indices are doing quite well with the Euronext 100 up about 14% Year to Date. Indeed it seems one of the leading indices of the world year to date beating FTSE 100, FTSE 250, US Indices, India, China. This seems to be in complete contrast to the situation some 6 months ago. What is it that is driving this momentum in Europe? Is it sustainable? Are there any good European Investment trusts worth looking at?
Notwithstanding the aspirations of the politicians, “Europe” isn’t really a homogenous entity and can be a bit of a mixed bag for investments as the performance of the individual countries and the companies within can vary widely. It’s a bit of a cliché but the northern countries, especially Germany, have the best historic track record with the occasional gem coming out of Scandinavia and the Low Countries. France should be strong but domestic politics and a vigorous tax/welfare state/ forceful labour representation have reportedly stifled entrepreneurship. Southern Europe has similar issues to France with less of the natural advantages. Eastern Europe (and on into Russia and the various “-stans”) are developing quickly and are especially interesting for primary commodity/resource companies. If you’re interested in mainstream Western Europe, there are 8 Investment Trusts that specialise in this area.
https://www.theaic.co.uk/aic/f...
Most of them are currently trading at a discount to NAV suggesting Europe is a bit off the radar for many investors. The two Henderson ITs (European Focus and Euro Trust) have good performance records over the past 1/5/10 years and are currently at 8.3% and 11% discounts respectively.
There are also 4 ITs with a smaller European company focus if that is your area of interest. These are similarly at a discount to NAV.
https://www.theaic.co.uk/aic/f...
There are several ITs/Funds with an emerging market focus that will pick up on Russia and the more Eastern countries.
Gus.
