GENEVA--(BUSINESS WIRE)--We have all the ingredients for a successful year in European equities. Corporates have managed to clean their balance sheets and their trust in the future is rising – which is supported by good GDP growth projections for the region. Europe is however no longer trading at a discount, which is why the quality of earnings is important.
UBP’s European Equities team’s consistent outperformance has been generated by high-conviction stock-picking and a pragmatic approach to style, adapting portfolios to suit all phases of the stock market cycle – they are active stock-pickers with a bias towards medium-sized companies, combining top-down and bottom-up research. The team’s favorite themes at the moment are the European recovery, value and restructuring – with a bias on domestic cyclicality, particularly within consumer discretionary, as well as on industrials and the mid-cap space.
The team has recently launched a European Opportunities strategy – stemming from two baskets that were created in 2013 – focusing on the recovery in Europe’s periphery and the resulting high-potential situations for companies in those regions. These companies, which have been exposed to the significant economic pressures experienced in peripheral Europe, remain undervalued and will benefit from the improving macroeconomic environment. The universe is limited to 25 to 40 stocks. The team has developed a track record of highly successful stock-selection within these themes, delivering a 31.56% gross return since the launch in May 2013 of one of the baskets.
This newest strategy completes the existing ones, providing investors with a broad range of solutions, whether they are looking for consistent performance, high yield or a defensive strategy:
The European equity strategy, which is one of UBP’s flagship strategies, is a high-conviction portfolio of the team’s best ideas in the European stock market. The portfolio comprises 50-70 stocks with no neutral positions or underweights, which results in a high active share (i.e. alpha generation). It is focused on themes such as e-commerce, mid-cap growth and restructuring stories, which has enabled the strategy to outperform its benchmark every year over the past three years with a 27.10% gross performance in 2013.
The Dividend+ strategy aims to provide steady income with low volatility, exploiting the dividend stream provided by blue-chip European equities. Europe is the highest-yielding of the developed markets. With companies rich in cash, the IBES consensus is targeting a 6% increase in dividends in 2014. The strategy aims to benefit from this attractive attribute of the European stock market whilst isolating equity volatility by selling covered calls. With 22 stable income-generating stocks, the strategy is an alternative to other yielding assets and delivered a performance of 6.69% in 2013.
The information and opinions contained herein were prepared by Union Bancaire Privée, UBP SA (hereinafter, “UBP”).
The information herein was obtained from various sources and is believed by UBP to be reliable but UBP makes no representation as to the accuracy or completeness of such information. Opinions, estimates and projections in this document constitute the current judgment of the author as of the date of this document and are subject to change without notice. UBP has no obligation to update, modify or amend this document.
This document is provided for information purposes only. It is not to be construed as an offer to buy or sell or solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction. The financial instruments discussed in this document may not be suitable for all investors and these materials should not be regarded by recipients as a substitute for the exercise of their own judgment. Investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situation and their investment objectives. Investors should be aware that foreign exchange rates may have a negative effect on the price or value of, or the income derived from, an investment denominated in a foreign currency. Furthermore, past performance is not necessarily indicative of future results.
UBP may make a market in, or may, as principal or agent, buy or sell securities of the companies mentioned in this document or derivatives thereon. UBP may have a financial interest in the companies mentioned in this document, including a long or short position in their securities, and or options, futures or other derivative instruments based thereon.
About Union Bancaire Privée (UBP)
UBP is one of Switzerland’s leading private banks, and is among the best-capitalised, with a Tier I ratio of 29%. The Bank is specialised in the field of wealth management for both private and institutional clients. It is based in Geneva and employs about 1,350 people in some twenty locations worldwide; it held CHF 87.7 billion (USD 98.6 billion) in assets under management as at 31 December 2013.