Managing Your Money 

CF Odey Continental European fund prospers in difficult times

CF Odey Continental European is among the top-10 best performing Europe ex-UK funds over three and five years in line with its objective of long-term capital appreciation. The long-term strong returns are partly due to the fund’s success in limiting downside during bad periods: for example, during 2008 it lost less than 3 per cent while the average Europe fund plunged nearly 24 per cent.

Odey Asset Management, which also runs a number of hedge funds, places an equal emphasis on preserving capital and generating superior returns in its funds. CF Odey Continental European has the ability to hold government bonds and other fixed interest securities if its manager wishes, though at present it is predominantly invested in equities, 97.2 per cent of the fund, with the balance in cash.

This defensive stance, however, means that CF Odey Continental European may lag market rallies such as in 2009 when it rose 3 per cent against more than 19 per cent for its sector.

Fund managers at Odey do not refer to benchmarks when constructing portfolios, but use judgment and primary research to set asset allocation, understand industrial cycles and to select stocks.

CF Odey Continental European's manager, Feras Al-Chalabi, favours areas of structural growth including luxury good companies, beneficiaries of capital expenditure, companies exposed to the domestic economies of Scandinavia, and special situations. "All of these have exited this recession with expanded market share and increased pools of economic profit," he says in his latest fund commentary.

Mr Al-Chalabi favours luxury goods companies such as LVMH Moet Hennessy Louis Vuitton because of the exposure they provide to faster growing regions such as Asia, and companies with strong global franchises such as Belgian listed Inbev.

He is bullish on the German and Swedish stock markets for the year ahead.

Full data and a PDF factsheet for CF Odey Continental European can be found here.

CF ODEY CONTINENTAL EUROPEAN (CGOE)

PRICE595.5pSHARPE RATIO0.05
SIZE OF FUND£354.41m1-YR PERFORMANCE13.58%
No OF HOLDINGS50*3-YR PERFORMANCE14.82%
SET UP DATE23 April 19975-YR PERFORMANCE51.42%
MANAGER START DATE1 April 2005*TOTAL EXPENSE RATIO1.59%*
FEESInitial 4%, annual 1.5%YIELD0.00%
VOLATILITY6.15MINIMUM INVESTMENT£5,000
TRACKING ERROR6.61MORE DETAILSwww.odey.com

Source: Investors Chronicle, *Morningstar.

Performance data as at 7 January 2011.

Top 10 holdings as at 30 November 2010

HoldingPercentage
Compagnie Financiere Richemont8.7
LVMH Moet Hennessy Louis Vuitton6.3
Swatch Group 5.7
Atlas Copco4.2
Inditex3.9
Swedish Match 3.6
Inbev3.5
Nestle3.2
Bayerische Motoren Werke3
Siemens2.8

Geographic breakdown

SectorPercentage
Germany23.00
Switzerland21.80
Other17.31
Sweden14.33
France13.47
Norway 4.36
Italy1.99
Portugal1.00
Netherlands0.98
UK0.90
Cash0.86

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