Starting XI: Which funds would win the UEFA Euro 2024?
18 JUN, 2024
By Jose Luis Palmer from RankiaPro Europe
The UEFA Euro 2024 is the 17th edition of the European football tournament organized by UEFA. It is held every four years and brings together the national football teams of Europe to compete for the continental champion title.
Last Friday, June 14th, the UEFA Euro 2024 kicked off and will last until July the 14th, with 24 national teams and Germany as the host country. This is the second time that Germany organizes the tournament, the first was in 1988 when it was still West Germany.
In the football world, the UEFA Euro is the stage where the best European teams compete to be the best. The same happens in the investment world, where investment funds face off on a European level playing field, seeking to stand out among the best to offer their investors the most robust and consistent performance over time.
Let's imagine for a moment that we could form a 'starting 11 of funds', an ideal lineup selected by fund selectors and that, without a doubt, would win the UEFA Euro 2024. These funds, like the players of the UEFA Euro, have been chosen for their ability to generate value, withstand market volatility and deliver exceptional long-term results. Here is the ideal 11 that we have compiled in collaboration with 11 fund selectors from all over Europe.
| Investment Fund | ISIN | Category | YTD Return | 3-year Return |
|---|---|---|---|---|
| Ruffer Total Return International | LU0638558394 | Flexible Mixed EUR - Global | -1.24% | -1.89 |
| Lonvia Avenir Mid-Cap Europe | LU2240056288 | RV Europe Mid Cap | 2.81% | -4.66% |
| Polar Capital Smart Energy | IE000OXQ5385 | Alternative Energy Sector RV | 3.85% | - |
| Lazard Japanese Strategic Equity | IE00BGPBV393 | Japan Large Cap RV | 11.65% | - |
| Finisterre Unconstrained Emerging Markets Fixed Income | IE00BYP55026 | Global Emerging RF - EUR Bias | 1.31% | -2.57% |
| JP Morgan Global Dividend | LU0329202252 | High Dividend Global RV | 10.50% | 10.25% |
| WisdomTree US Quality Dividend Growth UCITS ETF | IE00BZ56RD98 | US Dividend RV | 14.90% | 15.39% |
| Plenisfer Destination Value Total Return | LU2185979551 | Flexible Mixed USD | 6.08% | 4.88% |
| Janus Henderson Horizon Pan European Property Equities | LU0196034317 | Real Estate - Indirect Europe | -0.08% | -5.98% |
| Fidelity Global Industrials | LU0114723033 | Industrial Materials Sector RV | 6.61% | 11.89% |
| Global Impact Value Equity Strategy Sub-Fund | LU2279564707 | RV Global Cap. Flexible | 7.25% | 5.02% |
Ruffer Total Return International
Francisco Julve, Head of the Third Party Products at A&G
To be able to win a UEFA Euro you need to have a solid defense. When your team is attacking, it involves giving up forwards for defenders, without apparent need/utility and having fewer options to score. But when it comes to defending, that's when it really pays off to have a good defense, which can even sometimes go up to head a corner and score.
A good defender for a portfolio is Ruffer Total Return. A multi-asset fund with a macro approach and contrarian bias that seeks to protect the portfolio and its current positioning, based on a scenario of persistently high inflation, bets on inflation-linked bonds, commodities, equities at lows, taking advantage of low volatility to buy protection via options, short-duration bonds and cash proxies mainly.
If the market continues in attack mode, as is happening in 2024, the fund does not shine and penalizes the overall portfolio without losing money; but if the market turns around and we enter bear markets, it is prepared to achieve positive returns, as happened in 2022 when, with equities and fixed income falling double digits, it managed to end the year in positive.
Lonvia Avenir Mid-Cap Europe
Antonio González, Head of the Asset Management team at Renta 4 Banco
In an environment where the ECB is set to start lowering interest rates, we believe that small and medium-sized European companies are a good option for the more aggressive part of the portfolios. Currently, they stand out for trading at attractive valuations compared to their historical average and against large European companies.
The investment fund Lonvia Avenir Mid-Cap Europe plays in the league of medium-sized and innovative companies. They look for this type of companies in growing markets, especially the technology sector, that are capable of growing in a few years and that have high margins, strong cash flow generation, healthy balance sheets and high pricing power.
Polar Capital Smart Energy
Pablo Valdés, Investment analyst-partner at Orienta Capital
Addressing the enormous energy challenges from an environmental, security and cost efficiency perspective to drive generative artificial intelligence applications (GenAI), whose data processing capabilities consume a huge amount of energy, has become essential. Managing this challenge with an efficient approach means looking beyond the names of the main tech companies and focusing on the infrastructure that will allow them to keep up with future demand.
The strategy of Polar Capital Smart Energy, with its various sub-themes related to businesses focused on the development and implementation of more efficient energy, is oriented towards investment in businesses clearly exposed to this new ecosystem from a condition of facilitators and efficiency optimizers.
Lazard Japanese Strategic Equity
Guillermo Santos, Partner at iCapital
Lazard Japanese Strategic Equity does not follow an established benchmark. The set of compelling ideas on different topics allows creating a portfolio that can generate substantial outperformance in relation to the underlying benchmark index.
We expect the standard deviation of the portfolio to be aligned with the index, while the tracking error is not actively managed, although it is monitored daily.
Within its category (RV long only) it would be aggressive within a portfolio, but as a subtype of Japanese RV asset it is not a clearly defensive or aggressive fund, but rather adopts a contrarian approach, oriented to long-term fundamental value, trying to identify undervalued securities and the structural change of a company or industry that is not yet reflected in investors' expectations, this being the engine of outperformance.
Finisterre Unconstrained Emerging Markets Fixed Income
Conrado La Roche, Responsible for Fund Analysis and Selection at DPM Finanzas
This is an “all-terrain” fund that aims to optimize investment in emerging fixed income. Managed by Damien Buchet, CFA, who has 30 years of experience in emerging markets.
We believe it has all the characteristics to win the UEFA Euro:
- Consistency in results: the fund has generated alpha against its index in all calendar years since its launch.
- Good defense without giving up the attack: it has been able to reduce falls against the index by 50%, being able to capture 90% of the rises thanks to its flexibility.
- Good reading of the “matches” adapting to any environment: the management team's experience has proven to be very effective in all phases of the cycle.
JP Morgan Global Dividend
Matteo Petri, Head of Consulting and Advisory at Banca Aletti
We maintain a focus on dividends in our portfolios. In this context, we have selected the JP Morgan Global Dividend fund. It invests in companies that pay dividends selected based on the research conducted by JP Morgan's experienced analysts, who cover dividend analysis of 2,500 companies.
This is a basic global equity solution capable of generating a sustainable income stream over time. The portfolio, composed of between 40 and 90 companies, is mostly made up of companies whose dividends grow over time and, at the same time, have intrinsic growth opportunities. The fund does not have any specific style bias and focuses on quality values that pay dividends across all sectors.
WisdomTree US Quality Dividend Growth UCITS ETF
Anne-Valère Amo, PhD, Head of ETF Selection and Strategies at Trackinsight
"Quality without results is pointless. Results without quality are boring". Johan Cruyff
Despite the current market euphoria, it seems prudent to adopt a strategy for all types of environments in the face of upcoming geopolitical and macroeconomic uncertainties. With an eight-year track record, the WisdomTree US Quality Dividend Growth UCITS ETF provides access to 300 high-quality US companies that pay dividends, using a fundamental weighting and risk selection through a custom composite score that incorporates quality and momentum criteria, while excluding companies that do not meet WisdomTree's ESG selection.
In the last three years, it has consistently outperformed the S&P 500 index, demonstrating a superior Sharpe ratio, lower volatility, and reduced depreciations.
Gold medal and 5 stars according to Morningstar, the index strategy offers a dividend yield of 1.85% compared to 1.35% of the S&P 500 for a comparable price/earnings ratio of 24.41x and 24.79x, respectively, as of May 24, 2024.
Plenisfer Destination Value Total Return
Antonio del Vaso, Head of Investment Advisory at Volksbank - Banca Popolare dell'Alto Adige
Plenisfer Destination Value Total Return is a multi-strategy liquid alternative UCITS portfolio. It invests globally without benchmark indices, primarily long-only through five strategies, resulting in a portfolio diversified with respect to market betas.
Its goal is to maintain volatility below that of equity markets and is distributed among strategies based on available risk premiums. The fund combines equities, fixed income, and real assets, currently focusing on gold, energy, and essential commodities for the energy transition, such as copper and uranium. The overlay of hedges aims to improve convexity and generate asymmetric returns, therefore dynamic between growth and defense.
The investment team consists of 11 professionals, decisions are made by a committee of four founders who have been working together for over 20 years.
Janus Henderson Horizon Pan European Property Equities
Fabien Villeneuve, Portfolio Manager at Unofi
The economy continues to hold up, and potential rate cuts could stimulate growth, and perhaps also inflation.
In the fixed income market, an increase in risk premiums can be expected at the longer end of the yield curve. Volatility is likely to persist, especially if rate cuts are not linear. As for equities, the rise in financial markets should extend to neglected sectors. I believe there are opportunities in small caps, listed real estate, and Chinese equities. Gold mining companies could also be worth it.
Through the Janus Henderson Horizon Pan European Property Equities Fund we have good exposure to REITs. European listed properties are discounted compared to their intrinsic value, and can offer potential appreciation if interest rates fall (asset value preservation) or inflation rises (rent indexing).
Fidelity Global Industrials
Stefano Battel, Portfolio Manager at Cherry Bank
Thanks to its orientation towards the industrial, materials and energy sectors, the Fidelity Global Industrials is presented as an ideal option for investors, as the segment is at the center of certain structural trends at this historical juncture, particularly the return of production to home countries or those considered allies in geopolitical terms ("reshoring/friendshoring").
The fund primarily invests in companies active in development, research, production, and sales in the industrial and natural resources sectors, with a greater focus on "value-oriented" companies. The geographical focus of the strategy, despite overexposure to the US market, is global, including emerging markets. The portfolio is relatively concentrated, with 31% of assets distributed among the top 10 positions.
A defensive character fund given the value-oriented strategy.
Global Impact Value Equity Strategy Sub-Fund
Edmond Schaff, Portfolio Manager at Sanso Investments Solutions
Managed by Lyrical Asset Management, an American investment boutique with 7 billion USD under management, the sub-fund Lyrical Value Funds Lux - Global Impact Value Equity Strategy truly stands out as a fund article 9 of the SFDR and as a global equity strategy in general.
The management team seeks good quality and easy-to-understand companies that have fallen into oblivion in the market for various reasons and that, consequently, trade at really low multiples.
This differentiates the fund from most of the trendy "quality growth" managers and makes it an interesting complement to an equity allocation.
In addition, the fund manages to convincingly combine impact investing and value investing, a mix that is often considered "impossible".
