Sam Cosh-steered European Assets Trust (EAT) ticked up 0.7p to 80.7p on Friday on news it outperformed the benchmark in 2019, which proved a good year for European smaller companies.

While the alarming coronavirus outbreak has thrown economic projections for 2020 up in the air, lead manager Cosh insisted the trust is ‘in the fortunate position not to be leveraged heading into this market volatility’. Furthermore, he will use market falls to ‘slowly add some quality companies to the portfolio’.


These are companies that Cosh has looked at in detail before but haven’t been sufficiently attractively priced for an investment.

‘Over the long term, whilst unwelcome, this challenging period should therefore be an opportunity to build towards attractive long-term returns,’ added Cosh in the annual results statement from the BMO-managed trust, whose leading geographic exposures are Germany, Sweden, Italy and Switzerland.

Cosh runs a diversified book of small and mid cap growth businesses in Europe (excluding the UK). This area of the market is less well researched than the large cap ranks and allows Cosh to add value by running the rule over and buying picking quality growth names with long-run growth potential.

European Assets Trust, which has adopted a high dividend distribution policy, produced a net asset value (NAV) total return (the capital growth plus dividends reinvested) of 19.8% in sterling terms.

The trust also delivered a share price total return of 25.7%, boosted by a narrowing of the discount, thereby beating the 20.6% return from the benchmark EMIX Smaller European Companies (ex UK) index.


European Assets’ top 2019 performer was ASM International, a Dutch-listed semiconductor equipment supplier that rocketed 168.5% higher on consistently strong results.

The other holding that delivered outstanding returns was Italian asset manager Azimut, bid up a stunning 130.3%, while Denmark-listed regional bank Ringkjoebing Landbobank also proved a winner, its shares surging 46% higher as strong loan growth stoked profit upgrades.

Other good performers included online ticketing play CTS, healthcare stocks Tecan and Diasorin, two players in the invitro diagnostics space, not to mention Eastern European budget airline Wizz Air (WIZZ).


Poor performers included Irish-listed, weather-sensitive agronomist Origin Enterprises (OGN:AIM) and Dutch food service business Sligro, with the latter name struggling to integrate a large contract with Heineken during the period.

‘While we believe the deal will ultimately leave them in a strong position, we think that the integration will continue to be challenging, so have sold the position,’ explained Cosh, who has also sold long-standing holding Viscofan, a rival of London-listed Devro (DVO).

Spanish synthetic sausage skin producer Viscofan’s shares underperformed last year, although ‘since purchase it has added a lot of value to the portfolio’, stressed Cosh.

‘The decision to sell was taken because we felt the growth outlook had deteriorated and therefore left the valuation looking vulnerable.’


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Issue Date: 13 Mar 2020