Schroder European Alpha Plus research update

The Schroder European Alpha Plus Fund has had mixed performance over the last couple of years. The fund performed relatively well in 2008 when the market was falling fast, but although this year has seen strong gains it has lagged behind its peers.

This is due to the fund’s comparatively more defensive outlook, for example it had generally avoided the financial and consumer goods sectors. These areas had suffered greatly during the market fall, but have also led the way in the recovery so far.

Interestingly, some of the stocks in the portfolio that have been relatively weak performers in recent months are among Leon Howard-Spink’s favourite investment ideas. He remains confident that these investments are attractive with a long term view and has been using the weak share price to add to these positions.

Leon Howard-Spink has maintained his philosophy of focusing on companies that he believes are best able to deliver consistency of earnings growth and have a strong underlying business. In our opinion this is a sensible approach to investing in this climate. He recognises that the economic outlook for Europe is unclear and has built a portfolio he feels is well balanced between defensive shares and those that have more economically-sensitive characteristics.

In our opinion this fund remains a good prospect for the long term and continues to be a part of the Wealth 150, our list of favourite funds in each sector.

Stuart Goodwin
Analyst

Key Features of the Schroder European Alpha Plus Fund