In spite of all Europe’s travails in recent times, the continent’s publicly-quoted companies remain the core of IPE readers’ growth portfolios.
Petercam Equities Euroland is one fund that has assisted this growth with returns superior to the market. It has shown consistent cumulated outperformance (more than 70% over a 10-year timeframe, gross of fees) versus a traditional index, namely the msci EMU Net Dividends Reinvested.
Perhaps surprisingly, this cumulated outperformance has been achieved with relatively low (3-6%) levels of tracking error. However, we argue that high levels of active share characterise the management process of Petercam Equities Euroland throughout the cycle. For us, high levels of active share (>60%) are a useful and sensible way of gauging how ‘active’ a bottom-up diversified stock picker is. We consider this ratio to be a Key Performance Indicator of our investment process.
In addition, we demonstrate that the fund’s consistent outperformance over time has been achieved using a combination of two major investment features: a focus on bottom-up stock picking, particularly in the mid-cap space, and a thematic top-down overlay.
Please join Petercam on 14th January 2014 to debate what characterises genuinely active management in euro-zone equities.