European equities have produced relatively dismal returns over the past three years. To the end of October, the FTSE World Europe Index had gained just 7.8% in rand terms over the previous 36 months.
While this was ahead of the -3.7% decline in the FTSE/JSE All Share Index over the same period, it was significantly below the returns available in the US.
However, with the debate growing about the potential for a rotation out of US stocks into less expensive parts of the world, some asset allocators are looking at the opportunity in Europe. Just in the past few weeks, for instance, European banks have rallied hard following news about the successful trials of Covid-19 vaccines.
To examine how local fund selectors might express a view on European stocks, Citywire looked at the European equity funds available for sale in South Africa. Over the past three years, their performance tells an interesting tale.
The AS SICAV I European Equity fund is the clear stand-out performer over this period, returning 37.5%. This far surpasses the next best return – the 21.8% generated by the T. Rowe Price European Equity fund.
Both of these funds are run by highly-rated managers. The AS SICAV I European Equity fund is co-managed by AAA-rated Jonathan Allison, AAA-rated Ben Ritchie, and AA-rated Sanjeet Mangat. The T. Rowe Price European Equity fund is managed by AAA-rated Dean Tenerelli.
The remaining funds on the list of the top 10 performers have fared far less well. Four of them have under-performed the FTSE World Europe Index as a benchmark, and three of them have produced negative returns over this period.
See the full list of the top 10 performers over the past three years in the gallery below (click to enlarge):
Patrick Cairns is South Africa Editor at Citywire, which provides insight and information for professional investors globally.
This article was first published on Citywire South Africa here, and republished with permission.