With the eurozone recently pulling out of its longest recession on record and valuations looking attractive across the continent, investors may be considering a more aggressive approach to their European exposure.
However, fund managers focused on the space have flocked to defensive names over the past years, as the eurozone crisis soured investor sentiment towards the region and acted to channel money into ‘safer’ sectors such pharmaceuticals and consumer staples.
Robin McDonald, a member of the Cazenove Capital multi-manager team at Schroders, says: “European fund managers are still heavily weighted in what we would consider to be over-priced, defensive, US-facing companies, which have re-rated very aggressively. The majority of managers don’t own the more high-risk, high-beta value shares.”
However, McDonald and team head Marcus Brookes have been investing in funds exposed to higher risk areas of the European market since the summer of last year.