Summary of Investment Objective
The European Growth Fund seeks to maximise total return. The Fund invests at least 70% of its total assets in the equity securities of companies domiciled in, or exercising the predominant part of their economic activities in, Europe. The Fund places particular emphasis on companies that, in the opinion of the Investment Adviser, exhibit growth investment characteristics, such as above-average growth rates in earnings or sales and high or improving returns on capital.
Fund Manager's Report (as at Jul 31, 2010)
The Fund outperformed its benchmark over the month.
Outperformance was driven by both strong stock selection and sector allocation, with individual stock selection providing the majority of the gains. As markets rallied, positions in banks, capital goods and telecoms provided the strongest returns. A position in UK-listed telecoms stock Virgin Media performed well after the company reported strong Q2 numbers. In addition, a position in Tullow Oil gained following news that the company announced the sourcing of a new hydrocarbon system in Ghana. Within financials, our position in Societe Generale performed well in a rallying market and positions in UK banks Barclays and Lloyds Banking Group provided strong returns.
Transactions within the month centred on profit taking in stocks that had reached their price target and adding to strong growth names that have been oversold. We sold a position in G4S after a period of strong performance and in anticipation of mid-term headwinds given the company’s exposure to public spending, and added a position in Telefonica, which we feel offers strong growth prospects in Latin America and has been oversold due to concerns surrounding the Spanish economy.
At month-end, the Fund was overweight industrials, IT, consumer discretionary and energy and underweight consumer staples, healthcare, materials and utilities. Our outlook remains positive, despite the well-publicised economic headwinds within the region. Europe remains underowned and valuations continue to look compelling on a relative and historic basis. Europe also looks attractive on a yield basis with many European companies committing to or confirming dividend policies. With net cash on their balance sheets, we would expect European corporates to look for M&A opportunities in the coming months.
Fund Fact (as at Jul 31, 2010 )
| Status | Sub-Fund of Luxembourg SICAV |
| Fund Manager | Michael Constantis |
| Launch Date | Oct 14, 2002 |
| Base Currency | EUR (€) |
| Additional Dealing Currencies | USD ($) |
| Benchmark | MSCI Europe Growth Net |
| Morningstar Sector | Equity Europe |
| Total Fund Size (m) | EUR (€) 181.1 |
| EUSD Fund Attributes | |
| EUSD Fund Status | out of scope |
| Fees | % |
| Annual Management Fee (A shares) | 1.50 |
| Initial Charge (A shares) | 5 |
| Codes | |
| ISIN | LU0154234636 |
| Bloomberg Equity Ticker | MLEUGRA LX |
| Reuters Page Id | BLRKIX |
| Swiss Valoren Number | 1500665 |
| CUSIP | L1049G631 |
| Research Ratings | |
| S&P Fund Management Rating | A |
| Fund Risk Statistics | |||
|---|---|---|---|
| Name | 3 Years | 5 Years | Since Launch |
| Beta | 1.05 | 1.07 | 1.06 |
| Volatility (Annualised Standard Deviation) | |||
| European Growth Fund | 19.6% | 16.9% | 15.8% |
| MSCI Europe Growth Net | 17.8% | 15.0% | 14.3% |
Risk Grading
Low
High
Non-distributing
Important Information
The information on this website is available to Qualified Investors and Professionals in some jurisdictions on a limited private placement basis subject to applicable laws and regulations in the country of distribution. The information is confidential and should not be reproduced or distributed to persons other than the recipient.
The investment objective stated above is a summary of the main objectives of the Fund. Please refer to the BGF prospectus for full details.
A limited range of BGF sub-funds have a distributor status A share class that seeks to comply with UK Distributor Status requirements. Please contact the Manager for more information.
The fund invests a large portion of assets which are denominated in other currencies; hence changes in the relevant exchange rate will affect the value of the investment. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed.
BlackRock Global Funds (BGF) is an open-ended investment company established in Luxembourg which is available for sale in certain jurisdictions only. BGF is not available for sale in the U.S. or to U.S. persons. Product information concerning BGF should not be published in the U.S. It is recognised under Section 264 of the Financial Services and Markets Act 2000. BlackRock Investment Management (UK) Limited is the UK distributor of BGF. Most of the protections provided by the UK regulatory system, and the compensation under the Financial Services Compensation Scheme, will not be available. A limited range of BGF sub-funds have a distributor status A sterling share class that seeks to comply with UK Distributor Status requirements. Subscriptions in BGF are valid only if made on the basis of the current Prospectus, the most recent financial reports and the Simplified Prospectus which are available on our website. Prospectuses, Simplified Prospectuses and application forms may not be available to investors in certain jurisdictions where the Fund in question has not been authorised.
Sources: Fund – BlackRock Investment Management (UK) Limited (BIM(UK)L), Indices - Datastream, BIM(UK)L. Quartiles - Standard & Poor's. BIM(UK)L Risk Grading: High Risk (on a scale of Low, Medium, Medium/High and High). This grading applies to Funds with emerging market, small capitalisation, or narrowly focused/concentrated equity mandates, which may restrict liquidity and increase the volatility of returns. It should only be used for comparison with other BlackRock Global Funds (BGF) and, in particular, should not be used in comparison with Funds not provided by BIM(UK)L. The grading is indicative of the level of risk of a particular Fund and is not supposed to be a guarantee of likely returns. If you are in any doubt as to the level of risk that you should take, you should seek Independent Advice. BIM(UK)L Risk Grading: Medium/High Risk (on a scale of Low, Medium, Medium/High and High). This grading applies to Funds which may be expected to have all, or at least a high proportion, of their assets invested in equities, or in bonds rated below investment grade. It should only be used for comparison with other BlackRock Global Funds (BGF) and, in particular, should not be used in comparison with Funds not provided by BIM(UK)L. The grading is indicative of the level of risk of a particular Fund and is not supposed to be a guarantee of likely returns. If you are in any doubt as to the level of risk that you should take, you should seek Independent Advice.Performance is shown as at Jul 31, 2010 in EUR on a NAV price basis with income reinvested. Fund performance figures are calculated net of fees.