Euro Zone

The Euro Zone Equity strategy aims to outperform its benchmark, MSCI EMU Index, by 3-4% per annum over a three-year rolling period. It targets high returns and long term capital growth by investing in a portfolio of primarily equity and equity-related securities traded in Euro Zone markets.

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Euro Zone Equity Strategy

The Euro Zone Equity strategy targets strong excess returns by primarily focussing on bottom-up stock selection, but with an awareness of the prevailing macroeconomic conditions. 

Dean Smith has been managing the European equity strategies at TT since 1999. He invests in companies where their future prospects for growth of earnings and cash flow are not discounted in their market valuations. In his experience the most profitable investments come from identifying change in a company’s prospects which may come from industry or product cycles or more dynamic forces such as restructuring plans, divestment of underperforming businesses or accretive acquisitions.

Portfolio construction is the synthesis of idea generation, conviction and risk management. The strategy will typically hold between 40 and 60 stocks, with an active share of typically 75-80%.

The following aspects of our investment process provide an edge and set the TT proposition apart from the competition: 

  • Genuine active management. Many managers feel compelled to hold unattractive stocks just because they are large constituents of their benchmark. TT’s philosophy and heritage is entirely in active management, meaning we are focussed on deploying capital where we have the highest conviction.
  • Sell discipline.  This is a critical part of the process, as knowing when to sell is as important to the success of the strategy as knowing what and when to buy.
  • Catalyst.  Even if our fundamental research identifies an attractive and mispriced stock we will not buy it unless we can identify a catalyst that should make a share outperform. Our view is that cheap stocks can remain cheap indefinitely – identifying the catalyst gives us a competitive edge. 
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