Rob Burdett’s three funds to invest in Europe-Vision
Invest in Europe-vison
The 65th edition of the Eurovision Song Contest will take place this weekend. Ahead of the final, Rob Burdett, co-head of multi-manager at BMO Global Asset Management, reviews the investment case for Europe, including which sector funds get his vote.
We have yet to find a fund portfolio with exposure to all 39 countries participating in the Eurovision Song Contest this year, but Europe has been a happy hunting ground for stock pickers for years.
You don’t need many countries to get the equivalent of “twelve points” of fund performance. There are many stocks, different types of savings, and regional characteristics to provide a very interesting and balanced portfolio, and this scale means that many stocks also have low broker coverage.
We see opportunities in European equities if the dynamics of the global economic recovery and vaccine rollout continue to be successful. However, the political risks ahead could weigh on sentiment to some extent. The “ changing of the guard ” in Germany as Angela Merkel resigns, and further on the French presidential elections of 2022.
Against this backdrop, our portfolios are currently “underweight” in European equities, and while the UK has performed poorly on Eurovision in recent years, we have high hopes for UK assets. For these reasons, we preferred to play cyclical / reopen trade via UK assets for the first months of 2021.
Beyond the UK, there is a huge difference between the best performing and the worst performing funds in Europe. One-year returns for the LIM Equity Europe ex-UK sector range from -7.9% to + 75.6%, forcing investors to choose carefully. Keeping an eye on the future, we suggest that the following three funds managed by three of the entrants to Eurovision Rotterdam 2021 be taken into consideration.
Click to see Burdett’s Top Picks.