BlackRock European Dynamic Fund is the top performing Europe ex-UK fund over three and five years, and is in the top three over one year, in line with its aim for long-term capital growth. The fund's manager, Alister Hibbert, has managed it for less than three years but has already proved he can continue its strong returns.
He seeks companies which exhibit growth or value depending on the market outlook, looking for medium to long-term earnings power that is significantly higher than the market but not factored into the share price. Mr Hibbert also invests in restructuring and turnaround situations.
He considers recommendations from his colleagues in the Europe team, as sharing ideas and strong communication are an important part of the team’s approach. They also draw on ideas from other BlackRock teams.
Each fund manager in the Europe team has analyst responsibilities divided along sector lines. In their sectors, the team determines 12-month price targets and ranks stocks on the risk-adjusted upside potential.
BlackRock European Dynamic has little exposure to troubled countries such as Portugal, Italy, Ireland, Greece and Spain. Mr Hibbert says his approach to stock picking is largely bottom-up, though he will take a top-down view as a check, and ensure diversification. Risk awareness is also an important consideration.
The portfolio is concentrated, and aims for between 35 and 65 holdings as Mr Hibbert is prepared to back his convictions with sizeable bets at sector level. His strict sell discipline is driven by factors including changes to the investment case, achievement or reduction of price targets, and portfolio risk management, which can result in high turnover.
The fund's expenses are slightly higher than its Morningstar category median, though this is compensated by its strong positive returns.
BLACKROCK EUROPEAN DYNAMIC FUND (MYDEA)
|SIZE OF FUND||£770.94m||1 YR PERFORMANCE||18.60%|
|No OF HOLDINGS||51||3 YR PERFORMANCE||12.24%|
|SET UP DATE||01-Mar-02||5 YR PERFORMANCE||12.86%|
|MANAGER START DATE||03-Jan-08||TOTAL EXPENSE RATIO||1.74%*|
|FEES||Initial 5%, annual 1.5%||YIELD||0.21%|
|STANDARD DEVIATION||28.99||MORE DETAILS||www.blackrock.co.uk|
Source: Morningstar, *BlackRock.
Performance data as at as at 11.1.11.
Top ten holdings as at 30 November 2010
|Compagnie Financiere Richemont||3.1|