But Stephen Chamberlain
, the fund's portfolio manager and a director of Invesco Asset Management Ltd.
in London, says the long-term result shows the validity of his
style of growth management.
"We aim to invest in the best companies in Europe," he
says."That does not mean the biggest, for we also look for small- to mid-caps.But we do insist on companies that deliver a fast rate of growth over a sustainable period of time."
The stock selection criteria Mr. Chamberlain uses are fairly pure growth standards.He
relies on sustainable rises in earnings per share, subject to a value constraint.But there is a good deal of caution in the style, for Mr. Chamberlain, appointed to head the fund in mid-1996, has been pulling up its relative performance, increasing returns when markets thrived on expected benefits from European monetary integration, and holding on to substantial gains in market downturns.
Currently in the portfolio are:BMTV
, a German firm with rights to 28,000 half-hour shows of children's and family entertainment in Europe."This is a very fast growing company.As channels in Europe proliferate with the introduction of digital television, the value of content will rise," Mr. Chamberlain
says.Earnings of 0.07 euros per share in '98 should rise to 0.48 euros in '99, a 586-per-cent increase.Orange PLC
is rising as the market recognizes its good management and the value of its bandwidth.Within a few years, digital wireless will allow for the creation of numerous new services, all of which will add to cell companies' earnings, he
says.Orange lost money last year and will break even in 1999, Mr. Chamberlain
says.Altran Technologie SA
, Europe's leading engineering consultancy, which Mr. Chamberlain
purchased for 20 euros a share in November, 1998.Recently, Altran
has been trading at 300 euros, providing a gain of 1,500 per cent on a stock whose earnings, 4.5 euros per share for '98, should nearly double to eight euros in 2000.Ericsson AB
, a Swedish cellphone and infrastructure manufacturer that has been operating in the shadow of Finnish competitor Nokia Corp.Mr. Chamberlain
sees a great deal of potential in Ericsson
, however, noting that it has the largest installed base of wireless infrastructure in the world.
For the near term, Mr. Chamberlain
is optimistic that European stock markets will maintain a recovery from a poor start to 1999.He
explains that in the first half of 1999, the European Central Bank
had to maintain tight monetary conditions with attendant high interest rates to show its mettle and to support the euro.High rates hampered business growth, but the euro has begun to recover.Mr. Chamberlain
expects broadly based earnings increases in Europe this year and next year.If the euro continues to strengthen, it will tend to enhance returns expressed in Canadian dollars.
Mutual fund experts are impressed with what they see in Mr. Chamberlain's record of persistent gains.
"But the difference is that Mr. Chamberlain
has avoided mistakes."
© 2001 The Globe and Mail
.All rights reserved.
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