European Assets Trust, managed by Sam Cosh (pictured) has published its interim results for the six-months ended 30 June 2015. During the period, the trusts share price and NAV total returns (23.3% and 22.9% in Euro terms respectively) beat the Euromoney Smaller European Companies (ex UK) Index, which returned 18.5% during the same. Not surprisingly, a weakening Euro during the period impacted the trusts returns in sterling terms (12.6% for NAV and 12.2% for the share price versus the index’s return of 8.3%).
Stock selection continues to be the primary driver of performance. The largest contributor during the period was Leonteq, which rose 44.0% in Sterling terms. The manager says that there was no material news on the stock apart from strong full year results which in their view helped underline the strong progress the business is making. Finnish listed Amer Sports, was the next largets contributor rising 38.9%. The manager says that Amer Sports has undergoing a transformation following a period of mismanagement and recent results are demonstrating that the work is coming to fruition. Other performers of note, were Azimut and Banca Generali, the Italian asset managers who both announced significant inflows as they continue to benefit from the structural changes taking place in Italian wealth management.
Notable detractors included Origin Enterprises which fell 14.1% in Sterling terms (primarily due to the placing of 29% of its share capital by their majority shareholder). However, the manager continues to like the shares and have been adding in recent months. Another notable poor performer was Topdanmark the Danish non-life insurance company (a fall of 18.3%). The manager says this was a combination of profit taking following an exceptional period of performance but also concerns that their competitive environment has become less benign.
Three new positions were added in the first half. Atresmedia is a Spanish free to air TV company (management say it is starting to see the benefits of an improving end market, as advertising recovers, in a more consolidated market). Permanent TSB is an Irish bank (management say this is benefitting from a recovering end market which has consolidated). Cerved Information Solutions is an Italian business services company (management say it holds a dominant market position in providing credit information to both corporates and banks and that they’re expecting a decent and growing dividend).
European Assets Trust outperforms benchmark in H1 : EAT