EuroTrust dons Ray-Bans in search for quality European stocks

Turmoil in the eurozone is constant and as soon as problems are quelled in one country, trouble starts to erupt somewhere else. So what about investing in the region?

Tim Stevenson, manager of the Henderson EuroTrust, says he’s looking to growth companies to get the trust through the instability.

He has identified a handful of companies with growth potential and recently acquired Dutch semiconductor-maker ASML, Swedish healthcare company Elekta and Italian eyewear group Luxottica.

Stevenson has high hopes for Ray-Ban and Oakley maker, Luxottica, as brand appeal grows in emerging markets. The Italian company is rising in popularity and was unrated until earlier this year when its bonds were given a BBB+ status by Standard & Poor’s.

All trusts in the European sector have declined over the past year, with an average loss of 13% in net asset value (NAV). The EuroTrust has shed 11% in the past year and added 30% over the past three years.

However Stevenson has been looking for the right time to get back in to European banks and bought ING and Santander, earlier this year in what he now says was a premature jump back into the sector.

Like many European managers he’s avoiding utilities and telecoms, as low earnings and tough competition have made the sector unattractive. The sentiment echoes that of Thorsten Winkelmann, Citywire AAA-rated manager, who oversees the Allianz RCM Continental Europe fund, which is also looking to other sectors for growth.

The trust is currently trading at 510p, an 11.4% discount to its net asset value of 575.8p.