The case for investing in European equities has never been “so compelling”, according to SVG Investment Managers’ Andrew Goodwin.
Goodwin, manager of the SVG European Focus fund, argues that European equity valuations display attractive P/E ratios, which match the lows seen in the early 1980s and offer the best yield of any asset class at the moment.
The manager claims there are “significant opportunities” to invest in financials and peripheral Europe despite the ongoing fears over the health of the eurozone’s recovery.
Goodwin has invested in European financials across the debt crisis. Among the SVG European Focus fund’s top five holdings are Société Générale, ING Groep and Deutsche Bank.
In addition, Goodwin says a number of Portuguese, Irish, Italian, Greek and Spanish companies have defensive cashflows, healthy balance sheets and valuable market positions. For example, the fund owns Italian aerospace, defence and security company Finmeccanica Group in its top five.
“Staying in defensive sectors is a missed opportunity, as we believe many financial and peripheral European stocks will re-rate aggressively,” the manager says.
“Negative market sentiment surrounding the eurozone has created an attractive entry point for European equity investors and there is currently ample opportunity for stock-pickers to acquire quality companies at significant discounts.”