BlackRock European Dynamic: August 2026 fund update

• Lead manager Giles Rothbarth is supported by co-manager Alexandra Dangoor and one of the industry's largest European equity teams

• The fund invests mainly in larger European companies, with a flexible growth-focused approach

• We’re impressed by the team's research depth, intellectual curiosity and culture of constructive challenge

• The fund is on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The BlackRock European Dynamic fund aims to provide long-term growth by investing in European companies.

The fund tends to have a growth bias, which means the managers typically look for companies they believe can deliver stronger earnings growth than other investors expect. However, it’s more flexible than some other growth funds. The managers invest where they find attractive earnings opportunities, rather than being restricted to a narrow part of the market.

We think the fund could work well as part of the European portion of a broader investment portfolio, or within a global portfolio focused on long-term growth. Its focus on larger European companies and flexible growth approach means it could sit alongside funds using a more value- or income-focused approach.

Manager

The fund is managed by Giles Rothbarth, who joined BlackRock's European equities team in 2012. He became backup manager in 2015, formal co-manager in 2019 and lead manager in 2021. He’s also co-head of BlackRock's European equities team.

Rothbarth spent many years working alongside highly regarded investor Alister Hibbert, who previously managed the fund. We think this period of overlap helped provide continuity and gave Rothbarth the opportunity to develop within a strong investment culture before taking full responsibility for the fund.

Alexandra Dangoor became co-manager in 2026. She joined BlackRock in 2016 and has spent several years in the European equities team. She was previously co-manager of the BlackRock European Greater Europe investment trust from 2023. She’s worked alongside experienced investors within the team including Rothbarth over this time, and we think she provides important support to the fund’s management.

More broadly, the fund benefits from the support of one of the largest and most experienced European equity teams in the industry. We view this as an advantage over some peers.

Process

The managers believe that detailed company research can uncover opportunities where future earnings growth is not fully reflected in share prices. The fund is growth-focused, with a particular emphasis on company earnings and cashflow growth.

As part of their research, the team regularly meets companies and uses extensive data and a framework to assess potential investments. Ideas are debated across the wider team, which provides important challenge.

The team looks at companies through three broad lenses: wealth, resilience and change. In simple terms, they want to identify businesses they believe can create value for shareholders, understand how resilient those businesses are through different market conditions, and assess whether change within a company or industry could lead to stronger future earnings and cashflows.

The fund is focused on the managers’ highest-conviction ideas. This means it can look quite different from the benchmark and so performance can also be quite different at times. It invests in a relatively small number of companies – currently 42 – which means each one can have a meaningful impact on performance and increases risk.

The managers use a flexible approach, which means they don’t only focus on more traditional high-growth areas that some other growth managers focus on. For example, the managers currently find ideas across the industrials and financials sectors. In recent years they have increased investments in banks and some more economically sensitive (cyclical) businesses.

We view this flexibility positively. Importantly, the managers don’t invest in these companies simply because their share prices look lowly valued. They invest when they believe earnings growth and future upgrades are stronger than other investors currently recognise.

Current investments include semiconductor businesses ASML and ASM International, alongside financial companies such as UniCredit and ABN AMRO. While these businesses operate in different industries, the managers are positive about their future earnings growth prospects.

Culture

BlackRock is one of the world's largest asset managers and provides extensive research, risk management and technology resources. The European equities team benefits from a highly collaborative culture and significant analytical support.

In our meetings with the team, we’re impressed by their intellectual curiosity, depth of analysis and willingness to challenge each other's views. We think this culture of constructive debate is one of the team's greatest strengths and contributes to better investment decisions over time.

There has been some recent change within the wider European equities team, including the departure of some portfolio managers. However, the team remains well resourced and has added experienced investors. We’ll continue to monitor team stability, but we don’t currently view the changes as a concern for this fund.

ESG integration

BlackRock believes environmental, social and governance (ESG) factors can provide valuable insight into the risks and opportunities facing companies. As one of the world's largest asset managers, it has significant ESG research, stewardship and analytical resources that can be accessed by its investment teams.

That said, the firm has attracted criticism from various groups regarding its approach to ESG and stewardship. Some investors have argued BlackRock has not gone far enough in encouraging companies to improve environmental and social practices, while others believe it has taken too active an approach on sustainability issues.

This fund doesn’t have a specific sustainability target. Instead, ESG considerations are integrated into the team's research process. Analysts assess factors such as governance quality, capital allocation, environmental liabilities and stakeholder relationships. These considerations can affect conviction levels but are not used as simple pass-or-fail criteria.

Cost

This fund is available at an annual ongoing fund charge of 0.91%. We think this is a reasonable price to access a team we hold in high regard. The HL platform fee of up to 0.35% per year also applies, except in the HL Junior ISA, where no platform fee applies.

Both a buy and sell instruction will be subject to HL dealing charges. Find out more about our charges.

Performance

Rothbarth has built a strong track record since being involved with the fund. The fund has grown 140.71%* since he became co-manager in 2019, outperforming the FTSE World Europe ex UK Index return of 116.79% and 105.55% for the average fund in the IA Europe ex UK sector. As always, past performance is not a guide to future returns.

Stock selection has been a driver of long-term returns. We view this positively because it suggests the team's company research has added value over time, rather than performance being driven only by being in the right sector or investment style at the right moment.

Like all funds, this one won’t perform well in every environment. It struggled compared with the broader market in 2022, for example, when rising interest rates and a rotation towards value and cyclical companies hurt many growth-focused funds. The outperformance of value has also held back returns over the past year, though it still grew 8.74%.

Over the longer term, we expect the fund to perform well when the growth-style of investing is broadly in favour. It could lag when value investing leads the market sharply. We’re positive on the fund's long-term prospects, but as always there are no guarantees.