eURopeAn eqUiTy FUnD
It taKEs ExPERIEnCE to BuILD a HIGH ConVICtIon
PoRtFoLIo oF EuRoPEan CoMPanIEs FoCusED on
LonG tERM REtuRns.
to create a concentrated portfolio of 25-35 holdings from the diverse range of companies and economies of
Europe is no simple challenge. Head of European Equities, Fiona MacRae, has managed European investments
for over 22 years and has developed a deep understanding of European markets. such knowledge can only
be gained through many years of experience. Fiona and her team adopt a creative but disciplined approach
to high conviction stock selection and aim to invest in their chosen companies for the long term.
Fiona MacRae, Head of European Equities, is the Manager of the
alliance trust European Equity Fund. she is supported by a team of
three dedicated European equity analysts. the structure of the team
allows for flexible and quick decision making.
Fiona joined alliance trust PLC in 2008, Concentrated portfolio construction
bringing to the company a rare wealth of Fiona encourages a creative but
Fund highlights experience of European markets and disciplined approach to investing. a high
companies. Her team is based in our conviction stock picking approach is the
• Concentrated portfolio of 25 to
Edinburgh office and can boast over 40 key to the fund’s long-term returns. Each
years combined investment experience. member of the team is responsible for
• High conviction stock picking In addition, the team is able to call on carrying out genuine long-term analysis
approach the experience and expertise of our within the sectors they cover. a
Global Financials and Global Resources pragmatic approach to building a
• Long-term investment strategy:
analysts, as well as our well-respected concentrated 25-35 stock portfolio is
in-house Economics Research Centre to adopted and Fiona looks for the fund to
• Creative and disciplined strategy assist in asset allocation and to identify offer a diversity of investment themes.
market and sectoral themes. she is risk aware but not risk averse.
aLLIanCE tRust assEt ManaGEMEnt alliance trust European Equity Fund
LooKInG FoR tHE BEst IDEas
the European Equity team maintains a balanced approach across cycles. Fiona once the template is prepared, the team
describes the team’s investment rationale as generally pragmatic and occasionally meets to discuss the findings. It is very
contrarian. the team actively seeks those stocks which they consider are trading below much a team based discussion with the
their intrinsic value – for example, a company which has a good product, but may be aim of ‘stress testing’ the idea. the
driven by cyclical returns. they also look out for investments with solid management, conclusion may be that the stock does
which give a high rate of return on invested capital, generate cash flow, maintain a not meet its’ criteria, that further analysis
sustainable dividend policy and have a good / improving rate of return on equity. is required, or that the idea is
compelling enough to be included in
Idea Team Portfolio portfolio Construction and Monitoring
Research Monitoring the portfolio is managed in a
Generation Discussion Construction
concentrated manner, with strong
conviction in the team’s stock picking
ability and a disciplined approach to
both buying and selling stocks. the
the formal investment process of the conferences and aim to meet with the
minimum size of holding is targeted at
European Equity team is based around senior management of the companies in
2% of the fund. If the value of a stock
the 5 steps shown in the diagram above. which they invest at least once a year.
falls below this level it is subject to
It is driven primarily by a bottom-up the team uses external and internal
review. a decision is then taken to either
stock selection approach although there company research, further input from
buy more or sell out of the stock.
are times when themes and top-down the Economics Research Centre and
Median holdings tend to be between
issues are equally important. works closely with our Global Financials
3% and 4%. If a stock reaches its price
and Global Resources analysts in order to
target, it will be reviewed and a decision
idea Generation and Research identify themes to assist in the stock
made whether to move the target
Fiona and her team use macro-economic selection process.
upwards, to reduce the weighting or to
input from our Economics Research
sell out of the stock. sell decisions are
Centre, allowing them to create a Team Discussion
primarily event or development led,
portfolio with the ability to take Each of the European team members
such as changes in senior management,
advantage of evolving market is responsible for carrying out in-depth
corporate activity or earnings
conditions. the team initially discusses analysis of their chosen stocks and
disappointment and are not necessarily
and agrees their view of the overall produces a standardised template
target price or valuation led.
macro picture and the individual which details:
members are then able to concentrate
• the company’s business activities the team monitors the risk profile within
on their designated sectors and analyse
the portfolio continually and ensures a
the stocks within them which they • the major drivers and potential risks of
level of diversification through asset
consider offer the best opportunities. the company
allocation and risk management.
• the historic development of the although all analysis and discussion is
the members of the team engage with
company’s results team based, ultimate decision-making
prospective investments across Europe
lies with Fiona as Head of the team.
through one to one meetings with • the assumptions regarding the future
company management, site visits or development of the company
the team’s investment process Fiona and the team have regular
encourages creativity through open formal meetings including a daily
discussion and lively debate. team morning meeting to discuss markets and
members regularly discuss portfolio company results and a weekly meeting
CoMMunICatIon: holdings and potential new ideas. the to debate stock templates. ad hoc
tHE IMPoRtanCE oF analysts enjoy a positive environment to meetings to consider portfolio matters
contribute ideas for possible inclusion in are held frequently.
tEaM DIsCussIons the fund. overall portfolio responsibility
lies with Fiona MacRae, as Head of
European Equities, but the analysts have
a major role in stock selection.
For more information on alliance
trust asset Management and our
investment capabilities, please call
us or visit our website.
Managing Director, Business Development
Director, Head of UK Retail Sales
020 7710 8800
Past performance is not a guide to future performance. the value of
investments and the income from them may go down as well as up
and is not guaranteed. You may not get back the amount you invested.
Whilst care has been taken in compiling the content of this document, no
representation or warranty, express or implied, is made by alliance trust
asset Management Limited as to its accuracy or completeness. alliance
trust asset Management does not give financial or investment advice. If
you wish to invest, you should read the simplified Prospectus including
the terms and Conditions document carefully, particularly the section on
Risk Factors. the simplified Prospectus and Full Prospectus are available by
calling 0844 892 0349 or by writing to alliance trust asset Management
Limited, Po Box 23910, 12 Blenheim Place, Edinburgh EH7 9aJ.
alliance trust asset Management Limited is authorised and regulated by
the Financial services authority.
Alliance Trust Asset Management Ltd
8 West Marketgait, Dundee DD1 1Qn.
09-541 (December 2009)
alliance trust asset Management Limited is a subsidiary of alliance trust PLC. alliance trust asset Management Limited is registered in scotland no. sC330862, registered office, 8 West
Marketgait, Dundee DD1 1Qn; is authorised and regulated by the Financial services authority whose address is 25 the north Colonnade, Canary Wharf, London E14 5Hs firm reference
number 479764; gives no financial or investment advice.
Investing for Generations – at alliance trust asset Management, we offer a focused range of investment solutions to meet clients’ needs. Managed by our experienced team of
investment professionals using proprietary research, our unique long-term, high conviction approach to global investing has been tested and developed over generations through
diverse market conditions. Furthermore, we benefit from the integrity, durability and strength of alliance trust PLC.