The S&P index may be hitting record highs every couple of weeks in the US - but it is actually Europe that has been the star performer of the past 12 months. We examine which funds are best poised to capture future outperformance, based on Morningstar analyst ratings.
1. Jupiter European
Rated 
Gold
Jupiter European is a topnotch offering in its sector, says Morningstar analyst Muna Abu-Habsa. This fund has many of the features we like to see: a talented long-standing manager who is part of a highly experienced European equities team, a diligent investment process that has been proven through time, and a consistency of approach that investors can rely on.
Fund manager Alexander Darwall took over this fund in Jan 2001, but he joined Jupiter earlier in 1995. Darwall manages the fund independently but makes use of frequent exchanges with members of his European equity team at Jupiter, whose investment experience ranges between seven and 23 years.
2. Henderson European Growth
Rated Gold
Henderson European Growth features consistency of management and approach, which, in our opinion, make it one of the best offerings in its sector, says Abu-Habsa. This fund features seasoned managers in Richard Pease and Simon Rowe. Pease has maintained a strong association with European equities for the last two decades, executing a consistent investment process and delivering excellent results.
He has run Henderson European Growth since launch in July 2001 at New Star. Rowe has also been involved with the fund since launch, initially as an analyst, but he was promoted to comanager in April 2009. The duo joined Henderson following its acquisition of New Star and the fund was rebranded. At the time we thought they handled the transition over to Henderson extremely well, and despite the substantial outflows they ensured it was business as usual for existing investors.
3. Neptune European Opportunities
Rated Silver
A talented manager and a nimble approach should work to investors’ benefit at Neptune European Opportunities, says Abu-Habsa. Manager Rob Burnett took the reins here in May 2005, marking his first stint in running a European equity fund single-handedly.
However, despite his relatively short tenure in the industry, which spans nine years, Burnett has so far generated an impressive risk/return outcome for shareholders. The manager joined Neptune in June 2002 as an equity analyst but he took a quick leap into fund management shortly after in 2004 as he was given responsibility for the Neptune Japan Opportunities fund, which he ran for a year.
4. Schroder European Alpha Plus
Rated Silver
Schroder European Alpha Plus remains a strong Europe ex-UK equity offering, says Morningstar analyst Amaya Assan. Our conviction here rests largely on the presence of manager Leon Howard-Spink, who brings a level of talent to this offering that is rare in the fund industry.
Howard-Spink applies the same process here that he followed at Jupiter. He generates many of his own ideas in the same way that he did at Jupiter but he is able to cross-reference his ideas with Schroders' European and UK analysts. He is also supported by Paul Griffin, who works as a dedicated research and support resource for him, and he is in close contact with Schroders' other European managers, many of whom we hold in high regard.
5. BlackRock Continental European
Rated Silver
We continue to think highly of BlackRock Continental European.
Vincent Devlin took over when he joined BlackRock in March 2008, says Assan. He came from SWIP with more than a decade of experience and had amassed solid results at four Continental European funds.
Devlin joined BlackRock with seven of his SWIP colleagues, led by Nigel Bolton. Since then, we think the team has become one of the strongest European equity teams in the industry. Bolton unified the research process and established easier access to analytical data within the team. Each manager in the team has sector research responsibilities - this cohesive structure ensures the managers make good use of each other’s expertise.
