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CF Miton European Opportunities Fund tops GBP100m in assets


The Miton European Opportunities fund has delivered a return of 55.7 per cent since launch in December 2015, compared to 47.0 per cent for the FTSE World Europe ex UK index, and now has over GBP100 million in assets.

It ranks 3rd out of 107 funds in the IA Europe ex UK sector, which has returned an average of 40.8 per cent over the same period.
Managers Carlos Moreno (pictured), and Thomas Brown say: “Our multi-cap focus with a bias to mid-caps provides a rich hunting ground for quality businesses with pricing power and a strong competitive edge. We are genuinely active investors, with minimal exposure to just one of the top ten stocks in the FTSE World Europe ex UK Index. This approach has delivered strong returns since launch and attracted strong investor interest, boosting assets to over GBP100 million.
“It’s not easy for investors to be positive on the European economy, but with the right investment approach to the region, that becomes irrelevant. In a broad index, there is no shortage of good investment opportunities, often with long-term incentivised family management control.
“We like companies that are expanding globally from a European base. In mid-caps, this potential is not always recognised by the market, with many good stocks trading at a substantial discount to their intrinsic value.
“Our top holding Ferrari is a good example. A unique brand beginning to realise fully its pricing power and volume potential following a spin off from Fiat. Carl Zeiss and Ion Beam Applications have also been top contributors to performance since launch. We have a strong overweight position in healthcare, where a globally ageing population is driving demand. Where we differ is that we look away from traditional large cap Pharmaceuticals, where pricing power and regulation is a problem and instead focus on medical technology companies where the outlook is far stronger.
“Q1 company results have been good – the best for five years, and European political risk has diminished, but the bad news such as an apparent slowdown in China, and falling commodity prices, is being ignored.
“Against this backdrop, fundamental driven stock picking is more important than ever, and our stock selection has been the dominant factor driving outperformance, especially in industrials and IT.
“We have recently added to our holdings in optical retailer Grandvision, where we believe market sentiment will turn. A recent new position is Danish global bioscience company Christian Hansen. It is widely recognised as a manufacturer of starter culture for cheese and yoghurt, but we are more interested in its probiotic division. We see probiotics as a secular growth story (we also hold BioGaia) and Christian Hansen is the big daddy in the sector. We have added to our position in Xing, the German version of LinkedIn. We like the winner takes all and asset light business models of many online businesses and the fund has a large technology overweight.”
The fund’s top five holdings are Ferrari, Interroll, Amplifon, Scout 24 and Temenos Group.

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