Betting on a Revived Europe

Fund Watch

A Mutual Fund That Bets on a Revived Europe

Henderson European Focus has a lot of flexibility, and you can buy it without a load at discount brokers.


A new European renaissance may be in the offing, at least as far as stocks are concerned. After a long period of subpar performance—European shares have returned roughly 30% less than U.S. stocks since the bull market began in 2009—the Continent’s markets have a lot to commend them: friendly monetary policies, weak currencies (which boost profits for exporters) and signs of economic improvement.

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If you value experience, consider playing the revival through Henderson European Focus (HFEAX), whose manager, Stephen Peak, has been in charge since 2001. Over the past decade, Peak has beaten his rivals by an average of four percentage points per year by refusing to look like a clone of the MSCI Europe index. The fund has one-third of its assets in small and midsize firms—compared with just 8% in the index.

Peak builds the portfolio stock by stock. He invests mostly in growing companies, but he also owns out-of-favor stocks, such as British energy company BG Group. And he pays attention to the big picture, too. Reacting to China’s currency devaluation in 2015 and prospects for higher interest rates in the U.S., Peak has hedged the currency exposure for about 10% of his fund’s assets, somewhat mitigating the negative impact of a strengthening dollar. The fund’s Class A shares officially levy a 5.75% sales charge, but you can buy them without a load or transaction fee at several discount brokers.

@Rankings exclude share classes of this fund with different fee structures or higher minimum initial investments. **Closed to new investors. rMaximum redemption fee.

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