Europe remains land of opportunity for stockpickers
It is clear that there are significant concerns around growth in Europe, and investors are very right to be cautious. Core markets such as Italy and France remain firmly in the spotlight but a sustainable, broad economic recovery across the region remains unclear at the moment.
However, the fact remains that Europe has a large number of dynamic, successful and growing companies, many of them global leaders in their fields. Recent volatility has ensured that Europe remains a ‘land of opportunity’ for stock pickers who can identify these well-priced, attractive opportunities. When sentiment is negative, we find that the number of opportunities to invest increases.
We see a range of opportunities to invest in undervalued companies. We firmly believe that the market for small and mid-cap companies in Europe remains inefficiently priced and that fundamental analysis is the best way to identify under-recognised growth opportunities in this asset class – particularly as the small and mid-cap sector is under-researched and less well covered than large caps. This drive to identify mispriced opportunities has been the basis for the success of the Baring Europe Select Trust for the past three decades and we believe it will continue to underpin success going forward.
Nick Williams is manager of the Baring Europe Select Trust and head of Small and Mid Cap Equities at Barings