Last checked at 
LONDON (Alliance News) - European Assets Trust NV Friday said it performed better than its benchmark over the course of the first half of 2015.
In a statement, the investment trust said its net asset value rose by 12.6% in sterling on a total return basis, ahead of the 8.3% rise in its benchmark, the Euromoney Smaller European Companies (ex UK) Index.
The trust said the returns were hit by the weakening of the euro, which fell 9.5% in the six months.
"Valuations, on aggregate, do not look obviously attractive to us and rely on improving profit levels. On this front, however, there is room for some optimism. Europe is enjoying the benefit of a weaker currency, lower energy costs, a more liquid banking system and the start of quantitative easing," the investment manager's report said.
"Profit levels are well below previous peaks, in contrast to the US, and are starting to recover. The US had led the economic recovery, but it is now Europe which is showing improvements from a low level. If this were to continue, any meaningful profit recovery has the potential, in retrospect, to make current valuation metrics much more attractive. This will also of course disproportionately benefit smaller companies, who are more domestically focused then their larger counterparts," the investment manager added.
"Betting on profit recovery is always a dangerous game though, and we will not let it influence our process which has served us so well in recent years," the report added.
European Assets Trust shares were up 0.4% at 1,109.00 pence on Friday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
Copyright 2015 Alliance News Limited. All Rights Reserved.
