The fund’s largest country exposures are in the UK (33%), France (21.4%), and Germany (19.3%).
Its largest sector exposures are in financials (25.6%), industrials (19.2%), and consumer services (18.2%).
These exposures are driven by bottom up research as a result of S.W. Mitchell’s extensive company meeting programme rather than top-down macro calls.
Mitchell said he remains positive on European equities, as the economy continues to rebound from the Eurozone’s move towards normalisation, and that the recovery should receive an extra boost from the recent weakness in the euro, and falls in oil price.
“We continue to find the best opportunities in the more domestically orientated areas of the market,” he said.
“Banks make up 23% of the fund. We still believe that the market has failed to appreciate the benefits of a rapid recovery in financial margins coupled with draconian cost cutting and easing regulatory pressures.
“We have focused on the strongest retail banking franchises such as Lloyds and BNP where we believe that returns should rather rapidly return to pre-crisis levels.”
