European financials may not be flavour of the month but "when people sell off whole sectors, regions and countries, that's often when you get the baby thrown out with the bath water and when you find something interesting," argues Ben Lofthouse, manager of Henderson International Income Trust (HINT). "That's what happened this year in European financials."
Financials make up almost 20 per cent of the investment trust's portfolio and despite debates about the impact negative interest rates will have on bank earnings, Mr Lofthouse thinks there are interesting opportunities to be found in European financials. The fact that European banks have increased their capital levels means they are in a much better position than they have been in the past, he argues.
The trust's holdings include French multinational insurance firm AXA (CS:PAR) and it has recently bought its first bank in several years, Dutch bank ING (INGA:AEX).