Prosper With T. Rowe Price European Stock

Talk about about-faces. As well as the U.S. stock market has performed over the past year, European bourses have done even better. Two years after the near-collapse of the euro, the euro zone’s economy is finally on the mend and may emerge from recession by the end of the year. One of the best ways to play the recovery is with T. Rowe Price European Stock (symbol PRESX). The no-load fund, managed since 2005 by Dean Tenerelli, has topped its benchmark, the MSCI Europe index, in six of the past eight calendar years, including 2013.

Look Overseas for Cheap Stocks

The 75-stock portfolio holds companies of all sizes from developed European countries. But, says the London-based Tenerelli, “they are not the typical blue chips people see in many other funds.” He uses estimates of a company’s future free cash flow (the cash left over after the capital expenditures needed to maintain a business) to determine its current value and buys a stock when it’s selling below that figure. “I do not focus on growth,” Tenerelli says. “But I find a lot of interesting opportunities in slower-growing companies that the market overlooks because they seem boring.”

Spanish stocks boosted the fund’s results over the past year. These include broadcasters Atresmedia Corp. and Mediaset España, which have surged since Tenerelli began buying them—Atresmedia last spring and Mediaset late last year. Also contributing to the big one-year gain were Scandinavian financials, such as Nordea and Swedbank.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Bank revival graphic — K10I-FUNDTRENDS_RANKINGS.indd

Tan joined Kiplinger in June 2012 from Bloomberg News, where she was a reporting intern covering mergers and acquisitions and IPOs in New York. Prior to that, she worked as a production intern at CNN in Washington, D.C., where she assisted with political research and live broadcasts. She also covered financial regulation, including the Dodd-Frank Act, as a reporter for the Medill News Service. Before that, she wrote about economics and commodities in Chicago. She has written for the New York Times, MarketWatch, Businessweek.com, United Press International and the San Francisco Chronicle. She holds a BBA in finance from the University of Michigan and an MS in journalism from Northwestern University.