Charter European Trust plc - Investment Trust of the Year (Europe) '08
The award-winning Charter European Trust plc aims to deliver capital and income growth. It is a bottom-up, focused, European investment trust with a flexible mandate, currently favouring larger capitalisation 'growth' companies. Managed by Neil Dwane, CIO for RCM Europe, the trust benefits from his 22 years of investment experience.
Aim
The Trust’s objective is to deliver capital and income growth through investment in a focused portfolio of European securities.
History
The Trust was formed as part of the reorganisation of its predecessor, Charter European Trust plc in 2002. It was launched primarily to enable existing shareholders to rollover their investment and it follows a similar investment strategy. On 5th January 2007 shareholders voted to adopt a new benchmark index, the FTSE World Europe (ex UK), and to change the Trust’s name from to Charter Pan-European Trust plc to Charter European Trust plc.
Risk & Features
Investment trusts are quoted companies listed on the London Stock Exchange. Their share prices are determined by factors including the balance of supply and demand in the market, which means that the shares may trade below (at a discount to) or above (at a premium to) the underlying net asset value.
This investment trust charges 75% of its annual management fee to the capital account and 25% to revenue. This could lead to a higher level of income but capital growth will be constrained as a result. Your capital could also decrease if income paid out of capital exceeds the growth rate of the Trust.
Investment trusts can enhance returns through gearing. This can boost a Trust’s returns when investments perform well, though losses can be magnified when investments lose value.
(i) Share price source: Lipper, as at market close mid price.
(ii) A trust’s net asset value (NAV) is calculated as available shareholders’ funds divided by the number of shares in issue, with shareholders’ funds taken to be the net value of all the company’s assets after deducting liabilities. It is the capital NAV that is shown, which excludes any income.
(iii) A performance fee of up to 0.75% of net assets under management based on the level of outperformance of the Company’s net assets over its benchmark index during the relevant Performance Period. Please refer to the report and accounts for further information on the fee scale.
Charter European Trust PLC is incorporated in England and Wales. (Company registration no. 4314838). Registered Office: 155 Bishopsgate, London, EC2M 3AD. VAT registration no. 795 8598 39. The Company is a member of the Association of Investment Companies - Category: Europe.
Manager's Review as at 30.07.2010
July was a positive month for the markets with Europe outperforming the US. The majority of companies reported Q2 numbers which beat expectations and although the outlook for H2 2010 was often muted the market reacted positively. The best performing sector was financials and more specifically banks on better than expected loan loss provisions. Overall the month was characterised by outperformance of cyclical sectors with defensives lagging. On a macro level the news flow was less downbeat and fears concerning peripheral Europe subsided allowing recent underperformance versus the US to be somewhat reversed. Stock market valuations in Europe continue to be attractive both in relative and absolute terms and also offer a good level of exposure to emerging market growth.
During the month the Charter portfolio rose 6.57% while the benchmark rose 6.72% leading to underperformance of 0.15%. This was primarily attributed to a high cash weighting and sector strategy. The underweighting of banks was the key sector detractor and we continue to struggle to be comfortable in reducing this position despite the month to month volatility it contributes. Stock selection was very positive mainly driven by a new position in Bwin which has agreed a merger with Partygaming. We continue to hold the stock as we see a number of catalysts which should lead to a rerating. International Personal Finance contributed positively and we are comfortable that they will be able to secure the additional funding near term to remove financing uncertainty from their business. Yara was a strong performer given bad crop yields driving higher agricultural commodity prices and a renewed focus on the need for fertilisers to enhance yields. On the negative side our Sanofi and Fresenius healthcare holdings dented performance yet defensive valuations are historically attractive and should provide support.
Trust Manager
Neil Dwane,
CIO, Europe
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Neil is Chief Investment Officer Europe for RCM, based in Frankfurt, and is responsible for all portfolio management, research and trading activities in Frankfurt and London. Neil is a member of the Global RCM Executive Committee and is Chairperson of the European Equity Management Group, which consists of the most senior investment team leaders in Europe. Neil joined RCM in 2001 as Head of UK and European Equity Management from JP Morgan Investment Management where he had been a UK and European specialist portfolio manager since 1996. He began his investment career in 1988 with Kleinwort Benson Investment Management as an analyst, later as a fund manager before moving to Fleming Investment Management in 1992. Neil holds a BA in Classics from Durham University and is a member of the Institute of Chartered Accountants.
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The information contained herein including any expression of opinion is for information purposes only and is given on the understanding that it is not a recommendation and anyone who acts on it, or changes their opinion thereon, does so entirely at their own risk. The opinions expressed are based on information which we believe to be accurate and reliable, however, these opinions may change without notice.
(i) Share price source: Lipper, as at market close mid price.
(ii) A trust’s net asset value (NAV) is calculated as available shareholders’ funds divided by the number of shares in issue, with shareholders’ funds taken to be the net value of all the company’s assets after deducting liabilities. It is the capital NAV that is shown, which excludes any income.
(iii) A performance fee of up to 0.75% of net assets under management based on the level of outperformance of the Company’s net assets over its benchmark index during the relevant Performance Period. Please refer to the report and accounts for further information on the fee scale.
Charter European Trust PLC is incorporated in England and Wales. (Company registration no. 4314838). Registered Office: 155 Bishopsgate, London, EC2M 3AD. VAT registration no. 795 8598 39. The Company is a member of the Association of Investment Companies - Category: Europe.
Changes in rates of exchange may cause the value of investments and the income from them to go down or up. Source: RCM (UK) Ltd, all data as at 30.07.2010
(i) Share price source: Lipper, as at market close mid price.
(ii) A trust’s net asset value (NAV) is calculated as available shareholders’ funds divided by the number of shares in issue, with shareholders’ funds taken to be the net value of all the company’s assets after deducting liabilities. It is the capital NAV that is shown, which excludes any income.
(iii) A performance fee of up to 0.75% of net assets under management based on the level of outperformance of the Company’s net assets over its benchmark index during the relevant Performance Period. Please refer to the report and accounts for further information on the fee scale.
Charter European Trust PLC is incorporated in England and Wales. (Company registration no. 4314838). Registered Office: 155 Bishopsgate, London, EC2M 3AD. VAT registration no. 795 8598 39. The Company is a member of the Association of Investment Companies - Category: Europe.
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(i) Share price source: Lipper, as at market close mid price.
(ii) A trust’s net asset value (NAV) is calculated as available shareholders’ funds divided by the number of shares in issue, with shareholders’ funds taken to be the net value of all the company’s assets after deducting liabilities. It is the capital NAV that is shown, which excludes any income.
(iii) A performance fee of up to 0.75% of net assets under management based on the level of outperformance of the Company’s net assets over its benchmark index during the relevant Performance Period. Please refer to the report and accounts for further information on the fee scale.
Charter European Trust PLC is incorporated in England and Wales. (Company registration no. 4314838). Registered Office: 155 Bishopsgate, London, EC2M 3AD. VAT registration no. 795 8598 39. The Company is a member of the Association of Investment Companies - Category: Europe.
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