Asset class search: European uncertainty marks end to positive year

Prior to the war in Ukraine, European equity funds returned between 2% and 40% over the 12 months to the New Year, finds Mithursha Kesavan.

European (including UK) Equity ranked as the sixth-most-searched asset class by investors for the 12 months to February 28, 2022. This asset class also ranks fifth within the top-ten most-searched equity strategies in February 2022. There are 240 European (inc. UK Equity) funds within CAMRADATA Live. The performance returns for one year to December 31, 2021 ranged between 2.50% and 41.16%.

The total activity by size was All Cap (42%), Large and Mid-Cap (25%), Large Cap (24%), Small Cap (8%) and Small and Mid-Cap (1%). The total activity by style was Core (34%), No Predominant Style (28%), Growth (23%), Income (9%) and Value (6%).

CAMRADATA’s proprietary tool that ranks managers over five statistical factors shows that the best-performing manager for the three years to December 2021 was abrdn with its product European Smaller Companies Fund. This vehicle achieved an excess return of 19.25% over the benchmark, whilst taking excess risk of 8.97% to achieve it.

The best-performing manager for one year to December 2021 was NN Investment Partners Holdings N.V with its product NN Europe Core Equity. This vehicle achieved an excess return of 6.17% over the benchmark, whilst taking excess risk of 2.28% to achieve it.

In relative terms, for the three-year period to December 2021, 84 vehicles performed above the benchmark return and all vehicles took more risk to achieve this in comparison to the benchmark.

Since the conflict in Ukraine, there has been much volatility in the markets. However, at the time of writing, share markets have rebounded, helped by optimism about a peace deal and a fall back in oil prices. It is possible we may have seen the lows, but uncertainty remains high around the war and inflation is still likely to get worse before it gets better. So, Ukraine-related risks for investment markets remain high in the short term.

Mithursha Kesavan is an associate at CAMRADATA, the owner of Funds Europe.

*All figures are to 12 months rolling to February 2022 unless otherwise stated.