fund

Rated

This is one of our rated funds. They’re the ones our experts believe will do well for investors over the longer term. Top of the class!

BlackRock Continental European Income D

Large and mid-cap European (ex UK) equity fund with an attractive yield.

  • 178.60p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 272.10p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.75%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.93%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 3.10%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 27 January 2022, fund commentary last updated 22 November 2021

The fund aims to deliver a high income – at least 10% above the European market yield – as well as capital growth by investing in European (ex UK) companies. Portfolio managers Andreas Zoellinger and Brian Hall take a conservative investment approach, targeting steady growth and low-risk cash returns. Their bottom-up process involves splitting companies into three buckets – ‘above average yielders’ which yield over 4%, ‘steady growth’ delivering around 3% and the ‘unique franchises’ generating less than 2%. They invest predominantly in large cap stocks with a market value of over £10billion but also targets medium and occasionally small-cap companies. Their holdings include Danish pharmaceutical company Novo Nordisk and champagne and luxury fashion group LVMH.

Fund summary

Sector Europe Excluding UK
Structure UNIT TRUST
Launched May, 2011
Size £1,668m
Yield 3.10%
Charging basis Capital
Dividends paid 31 Jan, 30 Apr, 31 Jul, 31 Oct

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.22%
Annual management charge 0.75%
Ongoing charges figure 0.93%

Allocation

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Investment process

The fund’s investment universe comprises around 300 to 350 continental European companies with a market value over £1billion. Zoellinger and his team select stocks from amongst buy-rated recommendations made by the BlackRock European team. The fund’s management team wants companies with reliable dividends, strong corporate governance, a strong competitive position, financial discipline, and earnings stability. Zoellinger and Hall avoid highly volatile stocks. The portfolio includes three types of business – ‘high yielding’ companies where the dividend is secure, ‘stable quality’ companies offering solid dividends and highly predictable dividend growth and ‘structural winners’ offering high dividend growth but lower current yields. There is no yield requirement for individual stocks, though the managers avoid stocks with no imminent dividend. Indeed, Zoellinger will consider selling stocks if there is uncertainty about the next dividend payment. He is not a fan of holdings who “won’t pay” rather than “can’t pay”. The portfolio is concentrated holding around 40 stocks with the typical weighting being around 4%.

Manager Andreas Zoellinger is highly experienced, having spent over 20 years in the investment industry and having led the fund since launch in 2011. He benefits from the support, and also 20 years plus investment expertise, of co-manager Brian Hall, the income team and the wider BlackRock European team. The team have a more flexible approach than other European income funds, holding lower-yielding dividend growth stocks in additional to traditional high yield names. This is a clear differentiator and has helped created a diversified and well-balanced portfolio. The focus on more reliable stocks has provided a degree of resilience in falling markets and lower volatility, although it has often lagged in rising markets. However, the fund has consistently met its income target and delivered long-term outperformance against its benchmark. This is a good option for income investors looking for European equity exposure.

Manager research

Average monthly relative returns

  • 17/18 0.00%
  • 18/19 0.00%
  • 19/20 0.00%
  • 20/21 0.00%
  • 21/22 0.00%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years 0.00%
  • Career -0.31%
  • 3 years 0.00%
  • 5 years 0.00%
  • Career 0.00%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Andreas Zoellinger / Brian Hall

Andreas Zoellinger began his career a trainee with a major German bank, then joined Merrill Lynch Investment Managers (MLIM) as a European equity analyst in 2001. MLIM merged with BlackRock in 2006. Zoellinger now has responsibility for Eurozone portfolio management, adopting a flexible style, as well as being manager of the team’s income portfolios and an analyst in the consumer research pod. He earned a Diplom-Kaufmann degree in Business Administration from the University of Munich and the University of Edinburgh. Brian Hall, CFA, Managing Director and Portfolio Manager, is a member of the European Equity team within the Fundamental Equity division of BlackRock’s Active Equity Group. He has had responsibility for the management of the BGF European Value portfolio since December 2010 and co-manages Pan-European portfolios across the team. Prior to joining BlackRock in 2007, he was with Lehman Brothers, where he was a Director responsible for equity research on the European Capital Goods team. He began his career with Lehman in 1999. Hall earned a BSC degree, first class honours in economics with study in continental Europe from Bristol University in 1999.

Track record

The track record of Andreas Zoellinger / Brian Hall in managing mutual funds in this sector is still too short for us to draw any meaningful conclusions and so our assessment is based largely on qualitative aspects.

Periods of worst performance

Absolute -5.00% (August 2021 - September 2021)
Relative -4.00% (March 2021 - September 2021)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 30 November 2021

4.3989% Lonza Group Ag
4.2424% Edp - Energias De Portugal Sa
4.1568% Tele2 Ab
4.02% Zurich Insurance Group
3.9954% Enel Spa
3.9567% Novo-Nordisk As
3.9516% Sanofi
3.5089% Vinci Sa
3.4297% Tryg As
3.2033% Asml Holding Nv
Source: Trustnet

Sector breakdown

Industrials 29.00%
Financials 16.00%
Consumer Discretionary 13.00%
Health Care 12.00%
Utilities 8.00%
Consumer Staples 7.00%
Basic Materials 4.00%
Technology 4.00%
Telecommunications 4.00%
Others 2.00%

Portfolio

40-70 stocks, though typically at the lower end of this range.

Key Investor Information - Income

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Key Investor Information - Accumulation

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