Nick Train explains how, following a market dip last summer, he took the opportunity to buy into Amsterdam-listed brewer Heineken (HEIO).
"Last summer, we were thrilled to be offered the chance to accumulate shares (for Finsbury Growth & Income Trust) in what we regard as one of the world's great companies, Heineken, after a sharp drop in its price. Indeed, we continue to add, and now have around a holding worth around 8.5 per cent of the trust's assets.
"Heineken's stock had been battered because of concerns that its business on continental Europe would be impaired by the euro debt crisis. In fact, from that low last August, the shares have risen around 40 per cent."
Heineken's share price is around €40.59 in contrast to its 52-week low of €28.88. It is on a price-earnings ratio of 14.51 times.
"This is not because those fears about Europe turned out to be unfounded," continues Mr Train. "Heineken's sales have, indeed, been hit by the crisis. Instead, it is because investors have been reassured by the resilience of profits, even through a difficult period for beer volumes and, more importantly, enthused by Heineken's unfolding strategy to build its sales in emerging markets. The high calibre of Heineken's franchise has, to date, turned out to be more important for investors than the immediate troubled economic climate.
"Heineken is a good example of the type of situation where you should trust the company not the market, a theme that we are trying to capture for Finsbury Growth & Income's shareholders."
Earlier this year, Heineken acquired Asia Pacific Breweries, which takes the proportion of its emerging markets profits to over 45 per cent, or around 55 per cent if central Europe is included, and the share price has risen as a result.
"So far as our portfolios are concerned, when deals have been done this year shareholder reaction has been positive," adds Mr Train. "Barr, Diageo and Heineken have all been rewarded for pulling off business transforming acquisitions."
View the IC fund tips.
Visit our funds and ETFs page for fund profiles, interviews with fund managers and the latest fund news.
View our top 100 funds list.