This month, we are highlighting the FP Argonaut European Alpha fund as one for investors to watch.

We find this fund suitable for those who are looking for a core portfolio of European equities, which excludes the UK. FP Argonaut European Alpha’s top regional exposures include Italian, Irish and French companies.

The fund aims to achieve above average, consistent and stable high returns by investing in a concentrated portfolio of around 30-55 European stocks. The fund’s manager, Barry Norris, aims to outperform the MSCI Europe ex UK stock market index by either being fully invested or 100% market exposed. Norris has a distinctive earnings momentum style, which he refers to as his ‘earnings surprise’ investment process.

Despite being bullish on Europe, challenges remain, such as a slowing Chinese economy, deflationary pressures and continually slow policy reform action. For now, companies that are exposed to the domestic economies of Europe still remain interesting opportunities.

Investors should note that so far, European equities have risen strongly on actions from the European Central Bank. Due to the nature of the region and the development of European financial markets, we rate this fund as medium risk. It is best suited to those investors who want broad European region exposure in a well-diversified portfolio.

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