TRG : TR European Growth discount narrows as fund outperforms
TR European Growth’s results for the year ended 30 June 2014 show the fund delivering a 34.3% total return on net assets for the year – well ahead of the 26.8% return on the fund’s benchmark (The Euromoney Smaller Companies Index excluding the UK). TR European Growth’s discount narrowed from 16.9% to 12% over the period and this helped propel the return to shareholders up to 42.4%. The statement says these figures were also well ahead of the returns generated by TR European Growth’s immediate competitors.
The final dividend was hiked by 8.3% to 6.5p and they are proposing a special dividend of 2.7p.
The manager says their deliberate tilt towards out-of-favour, domestic exposed European stocks helped performance as did focusing on stocks that have the ability to help themselves by delivering operational improvements. The report highlights Spanish bank Bankinter and real estate company Inmobiliaria Colonial and machinery manufacturer IMA and asset manager Azimut in Italy. The portfolio also benefited from a high weighting in technology: Swiss electrical component manufacturer Comet; German high-tech equipment manufacturer Manz; and German construction software company, RIB Soft, all did well.
The biggest contributor to performance though was a company that they developed significant concerns about and sold on worries about accounting issues, Spanish wi-fi and telecommunication services provider Let’s Gowex. They sold out of the position and it subsequently turned out that there was a fraud in the company.