Using the return-based Portfolio Style Analyser by London-based firm Style Research, this month we analyse the portfolio style of an European equity fund, the Barclays (Lux) Euro Equity fund.
For the analysis we have use the fund’s historic data over the last four years, starting in January 1996, from Standard & Poor’s Microplal. The portfolio style analyser permits to make different adjustments regarding countries and sectors. Here we have used a country –based adjustment.
The Barclays Euro (Lux) Equity fund was launched in 1987 with the investment objective of achieving long-term capital growth from investing in the European equity market.
The graph shows the changes in portfolio style that the fund has had during the past 12 months, starting in September 1999. On this date the portfolio’s exposure to large value European stocks represented 78% of the total assets. The remaining 22% were allocated to large growth shares.
During the following months, the percentage dedicated to large growth investments increased, reaching the highest point in July representing 45% of total assets.
The Barclays (Lux) Euro Equity fund has been rated two stars by Micropal, and has shown a three -year performance of 31.7% with 5.05 volatility.
Since 1990, the annual performance of the fund was above the sector’s on eight occasions. Compared to the European equity sector’s average performance, the fund achieved its best results in 1993 when it produced 19.29% while the sector only reached 10.12%
The performance during the last year has not been so good. According to Micropal’s data, from December 1999 to June this year the fund’s performance has been below its sector.
According to the results of the portfolio style analysis, the fund has recently introduced some exposure to small growth stocks. In September, investments in large value and large growth stocks represented 57% and 43% respectively, but the graph shows how at the beginning of October 3.7% of the total assets were moved to small growth shares. The percentage of these investments has increased since then and at the end of November accounted for almost 10% of the total value of the fund.
The introduction of small growth securities during the last three months of the year decreased the exposure to large growth stocks from nearly 43% in October to around 33% at the end of November. However, the presence of small growth shares in the portfolio did not affect the exposure to large value investments which, according to the analysis, maintain the same percentage, around 57% during the last two months of the period analysed.