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LONDON (Alliance News) - European Assets Trust NV Friday said it performed favourably against its benchmark in 2013, as its investment manager's decision to invest in the financial sector was rewarded.
The trust, which targets capital growth by investing in quoted small and medium-sized companies in Europe, but not the UK, reported a sterling net asset value total return of 37.8% compared with 28.2% in 2012 and a sterling share price return of 47.5% compared with 36.0% in 2012.
The Euromoney Smaller European Companies (ex UK) Index gave a 37.5% sterling return.
It increased its annual dividend to EUR0.699 from EUR0.5502.
Fund manager Sam Cosh said the strong returns were a result of not being swayed by dogmatism.
"During the crisis we saw that the biggest component of value in the markets was the financial sector; investors had abandoned these companies wholesale. This presented opportunities to invest in quality businesses at significant discounts to their intrinsic values. These were the companies that drove performance in 2013. Of note was Azimut, the leading Italian asset manager, which rose 94.2%," Cosh said in his review of performance.
"The other strong performers came from the consumer cyclical area, with a new holding, Plastic Omnium, performing particularly well, increasing 105.9%. The company is a French supplier of niche equipment to the auto industry," Cosh said.
He added that there was no significant capital loss in 2013 and was optimistic on the prospects for European small companies in the new financial year.
"This is because the two principal determinants that decide future returns for shareholders, namely valuations and cash flows, look attractive to us," Cosh said.
"The other potential positive we see is the return of corporate activity, or mergers and acquisitions. Activity levels are at record lows, but the ingredients are there for a significant pick up if confidence levels were to improve with a better economic outlook," he added.
Meanwhile, the trust has proposed to appoint Julia Bond and Jack Perry to the supervisory board after the sudden death of Giles Warman in May 2013.
Bond has 27 years' experience of capital markets in the financial sector and held senior positions within Credit Suisse, while Perry is the Chairman of ICG Longbow Senior Secured UK Property Debt Investments.
European Assets Trust shares were Friday quoted at 1,009.99 pence, up 0.5%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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