European equity funds have not received strong inflows in 2018, according to Mathieu Caquineau, senior analyst for manager research at Morningstar.
“Year-to-date, it has been a choppy market with a lot of political noise around Italy,” he told FSA, referring to the Italian budget proposal, which clashes with EU expectations.
Additionally, the UK has been publicly struggling to hammer out a Brexit deal that is amenable to both sides, creating negative sentiment among investors.
Like global markets, the European market is down year-to-date, with the MSCI Europe Index in negative territory (-5.70%), according to data from FE Analytics.
European equities also had the second lowest ranking in terms of forward-looking sentiment, after the US, among fund selectors in Asia, according to data from Fund Selector Asia’s Asset Class Research.
Only 9% of fund selectors surveyed indicated that they will be increasing allocation to the asset class in the next 12 months, while 22% are expecting to reduce their holdings in European equities.
Against this backdrop, FSA asked Caquineau to look at two Europe (plus UK) equity funds: the Invesco Pan European Structured Equity Fund and the Jupiter European Opportunities Fund.\
|
Invesco |
Jupiter |
|
| Size |
€5.4bn ($6.14bn) |
€264m ($300m) |
| Inception |
2000 |
2001 |
| Manager |
Michael Fraikin and Thorsten Paarmann |
Cédric De Fonclare |
| Three-year return* |
-1.46% |
-4.86% |
| YTD alpha** |
-1.80% |
-4.05% |
| YTD volatility** |
12.82 |
13.21 |
| Morningstar analyst rating |
Silver |
Silver |
| Morningstar star rating |
***** |
**** |
| FE Crown fund rating |
**** |
** |
| OCF (retail share class) |
1.57% |
1.72% |
| OCF (clean share class) |
0.88% |
0.95% |
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