The second part of our series concentrates on the Reeves Independent Opportunity Portfolio. This Portfolio consists of 4 Funds – 2 from the European sector & 2 from the Financial sector. The areas of European equities & Financial stocks have been some of the worst performers over the past 3 years, so why have we constructed a Portfolio including these?
Firstly we will highlight why leading fund managers believe this might be the right time to be investing in European funds now. Here is a summary of what they are saying;
- Increased stability due to the European Central Bank’s (ECB) fresh offer of cheap three-year loans
- European stocks have been lifted by news of a second bailout for Greece
- There is a an opportunity to potentially make gains as there is a belief that stocks are substantially undervalued
- Improving economic conditions from the US will have a knock-on effect in Europe
However many risks remain in the Eurozone & this must be considered when making investment decisions.
Within the Reeves Independent Opportunity Portfolio clients have the option to invest in the Aberdeen European Equity Fund & Artemis European Growth Fund. Both funds vary significantly with respect to where they invest. Aberdeen has a large investment in the Industrial sector as and concentrates primarily in Germany, whereas Artemis concentrates more on the Financial sector & weighted in Switzerland & France.
Secondly what positive thoughts are coming from the experts about the Financial sector & why should this be an area to invest in? Here is a short summary of what our team at Reeves Independent have found;
The ECB’s Long-Term Refinancing Operation (LTRO) has genuinely reduced the risk of a liquidity crisis in the European banking sector
Improving economic conditions in the US has had a positive impact in the sector as a whole
There is an opportunity to potentially make gains due to a belief that a number of institutions with strong franchises & strong balance sheets within the developed markets are significantly undervalued
However rising regulatory costs means likely continued deleveraging by European Banks, as well as the ongoing financial & political risks in the Eurozone means this is a volatile sector in which to invest.
Our clients they have the opportunity to invest in either the AXA Framlington Financial Fund or the Henderson Global Financials Fund. Both Funds are very similar is respect to where they invest with over 30% in North American Equities & both having over 40% in the Banking sector.
The primary difference between the Funds is that AXA Framlington has 19.2% invested in Real Estate, which is twice as much as Henderson. This actually backs up the thoughts of the Reeves Independent Team as we have an Add Ons Portfolio that enables more speculative clients to invest in various Property Funds.
These funds are for investors who are prepared to take a longer term view & except volatility to achieve potentially substantial gains. Additionally we would only expect our clients to have a small percentage invested rather than large bulk investments due to the volatility factor.
Further details about how to access this portfolio, these funds and the Reeves Independent Wealth management service are available by calling 0191 281 9862 or e-mail email@example.com NOW for a FREE initial chat!