Fund Buyer Index

Worst European equity funds of 2018

Posted in Jan 2019
by Jassmyn Goh

No European equity funds available to continental Europe-based investors made a positive return in 2018, according to FE Analytics.

The only two European equity funds that did manage a return for investors during 2018 were the Oldfield Overstone Ucits EAFE Equity A fund and the Boussard and Gavaudan Erisa A fund, which returned 8.6% and 3.6% respectively. However, these two funds were not available to continental European investors.

While quite a small fund at €14.4m, the Oldfield fund had largely UK stocks at 36.9%, followed by Germany (13.3%), France (11.5%), Italy (10%), and Sweden (5.9%).

Its largest sector weightings were in industrials (22.6%), financials (18%), and energy (10.9%), with consumer discretionary and consumer staples both at 9.6%.

Best fund a loser

The best performing European equity fund over the year to 31 December 2018 available to pan-European investors was the Seilern Stryx Europa UR fund which lost 1.3%. However, this compares with the pan-European STOXX 600 index, often used as a benchmark, which fell 10.2% in 2018.

When the fund data is drilled down further, it is clear that European equities really suffered in 2018 as any fund that lost around 10.6% was still considered to be in the top performing quartile.

Sentiment toward European equity funds was also weak last year and has been on the slide since the second quarter of 2017. The sector ranked 23 out of 26 in popularity among European fund selectors in the fourth quarter of 2018 , according to Last Word Research.

That research found that in Q3, 23% of selectors were looking to buy European equity funds over the 12 months to September 2019, 55% were looking to hold, 18% to cut positions, while 4% did not use the asset class.

According to Morningstar, between January and October of 2018 only two months saw inflows into the sector, while the asset class experienced outflows of €16.13bn over this time period.

See the performances

Click through the gallery to find out which European equity funds had the most disappointing 2018.

The funds in this gallery were found using FE Analytics within the FCA Recognised and OffShore Mutual universes that were domiciled in either Luxembourg or Ireland, and were available for sale in at least three continental Europe countries.

5. MultiConcept PMG Partners Funds Aktein Welt ex Schweiz A v sector and benchmark performance year to 31 December 2018

The multiconcept fund comes in at fifth worst European equity fund for the year to 31 December 2018 at a loss of 26%. Its sector, Offshore Mutual Europe including UK equity, made a loss too at 13.4%.

While both the fund at its sector have continued their losses since mid-May 2018, the fund has not made a return over the past five years.

Over the five years to 31 December 2013, the fund lost 18.3%, compared to its sector that returned 10.3%.

4. Commerzbank Europa One R v sector and benchmark performance year to 31 December 2018

The Commerzbank Europa One R fund came in at fourth worst performing European equities fund over the year to 31 December 2018 at a loss of 26.3%, according to FE Analytics.

This was compared to its benchmark, Stoxx Europe 600 that lost 10.2% and the Offshore Mutual Europe including UK equity sector that lost 13.4%.

However, over the three years to 31 December 2018 the fund beat its sector at 1.3% compared to a loss of 5.97%. The Stoxx Europe 600 was up 2.2% over the same period.

According to the fund’s annual report, the fund has its highest country weighting towards France (19.4%) and its highest sector allocation towards diversified services (15%).

3. Fidecum Avant Garde Stock B v sector and benchmark performance year to 31 December 2018

The Fidecum Avant Garde Stock B fund was the third worst fund for the year with a loss of 26.9%, according to FE Analytics.

The fund fell much more sharply in October compared to its sector and the benchmark which ended the year with losses at 10.2% for the Stoxx Europe 600, 12.95% for the FCA Recognised Europe including UK equity sector, and 13.45% for the Offshore Mutual Europe including UK equity sector.

However, the fund has a four out of five Crown Rating from FE, meaning that it falls within the top 15% that have performed well against their benchmark over the past three years.

Over the long term, the fund returned 18% over the five years to 31 December 2018. This was above the FCA Recognised sector at 12.6% and Offshore Mutual sector at 10.3%, but below the Stoxx 600 Europe benchmark at 21.4%.

According to its factsheet, the fund has its highest country weighting towards France (20.6%), followed by Germany (15.1%), Netherlands (14.4%), Switzerland (13.1%), and Denmark (6.3%).

Its largest sector allocation was for financials (22.4%), industrials (21.3%), technology (13.8%), basic materials (9.3%), and heath care (7.4%).

2. Multipartner Sicav Carthesio Analytica Equity E v sector and benchmark performance year to 31 December 2018

The second-worst performing European equity fund, Multipartner Sicav Carthesio Analytica Equity E, made a loss of 29.1% over the year to 31 December 2018, according to FE Analytics.

While the fund performed similarly to its sister fund, the Offshore Mutual European including UK equity sector, at the beginning of the year, the performance dropped sharply in October 2018. By the end of the year, the fund had lost 13.3%.

According to Morningstar, the fund has its highest country weighting in France (29.3%), followed by Germany (22.9%), Italy (22.3%), Portugal (5.6%), and the UK (3.6%).

The fund has its highest sector allocation towards financials (40.1%), followed by communication services (12.2%), industrials (11.9%), consumer cyclical (8.6%), and consumer defensive (7.6%).

1. Axxion PEH Q Europa v sector and benchmark performance year to 31 December 2018

The Axxion PEH Q Europa fund was the worst performing European equity fund over the year to 31 December 2018 with a loss of 29.9%, according to FE Analytics.

Over the last decade the €3.9m fund has not made a return with a loss of 9.3% over the 10 years to 31 December 2018.

While the fund’s sector and benchmark, Stoxx Europe 600, also took a hit mid-June 2018 the Axxion fund took a sharp dive comparatively and continued a steep decline.

The Offshore Mutual Europe including UK equity sector lost 13% and the Stoxx Europe 600 lost 10.2% by the end of 2018.

According to Finanzen, the fund has its highest country weighting towards Germany (64%), followed by France (9.9%), Austria (7.5%), and UK (6.2%).

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