Investment Trusts

Raising the bar - European Assets Trust

Adding to quality businesses at attractive valuations is just one of the themes explored in Edison’s recent research note on European Assets Trust.
October 2020

Risk Disclaimer 

Past performance should not be seen as an indication of future performance.

The value of an investment is dependent on the supply and demand for the trust’s shares rather than its underlying assets. The value of the investment will not be the same as the value of the trust’s underlying assets.

Changes in rates of exchange may have an adverse effect on the value, price or income of investments. If markets fall, gearing can magnify the negative impact on performance. Where investments are made in smaller companies, their potential volatility may increase the risk to the value of, and the income from the investment.

Opinions expressed by individual authors do not necessarily represent those of BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

With its focus on a carefully selected portfolio of 40-60 small and medium-sized companies, European Assets Trust (EAT) offers access to what fund managers Sam Cosh and Lucy Morris believe to be the best and most attractively valued businesses drawn from a broad and geographically diverse opportunity set.

  • Growth and Income – EAT aims to deliver long-term capital growth as well as an annual distribution payment of 6% of the net asset value (NAV) at the end of the previous year.
Share
Subscribe to our Insights
  • Entry point? – although ground has been regained from their sharp Q1 selloff, many small and mid-cap European equities look good value relative to larger counterparts, history and other regions. For long-term investors, perhaps now is a good time for to enhance geographic diversification by bolstering European SMID allocations?

 

  • Price matters – the managers’ approach is clear and disciplined – to invest in well-managed quality businesses trading at attractive valuations. The latter characteristic is the key determinant of returns but can prove to be an elusive trait – Q1’s selloff however, provided an entry point into a number of great companies that had been on the team’s watch list.

 

  • Sanguine on Brexit – negotiations rumble on but Sam and Lucy are relaxed about its potential impact on the portfolio. The Trust’s only UK holding isn’t reliant on the UK for earnings and any further sterling weakness could see shareholders benefit.

 

  • Fee reduction – April 2020 saw the annual management fee received by BMO Global Asset Management reduced to 0.75% up to €400m of AUM and 0.6% on assets above this level.

Related articles

No posts matching your criteria

Market roundup: short-term uncertainty but silver linings

Peter Hewitt, Manager of BMO Managed Portfolio Trust, discusses the short-term risks he sees in the market and points out some important silver linings.

Value (and quality) matters

Phil Webster explains how recent weakness allowed him to invest in quality names at the right price and discusses a rare IPO addition to BMO UK High Income Trust.

Latest Kepler Trust Intelligence report on BMO Commercial Property Trust

With the Trust trading at a wide discount, Kepler suggest that there’s potentially value in the current share price.

Investment trusts: dependable dividends during the crisis

Many investment trusts have committed to or even increased dividends recently, despite the ongoing economic crisis – Peter Hewitt explains why.

Perspectives on global smaller companies

Peter Ewins discusses the impact of COVID-19 before suggesting where opportunities may be found in the future.

Positioning commercial real estate to outperform

Peter Lowe discusses the unprecedented challenges to the real estate market due to Covid-19, and what we are doing to navigate the challenging market.

Risk Disclaimer 

Past performance should not be seen as an indication of future performance.

The value of an investment is dependent on the supply and demand for the trust’s shares rather than its underlying assets. The value of the investment will not be the same as the value of the trust’s underlying assets.

Changes in rates of exchange may have an adverse effect on the value, price or income of investments. If markets fall, gearing can magnify the negative impact on performance. Where investments are made in smaller companies, their potential volatility may increase the risk to the value of, and the income from the investment.

Opinions expressed by individual authors do not necessarily represent those of BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.