fund
BlackRock Continental European Income D GBP Hgd
Large and mid-cap European (ex UK) equity fund with an attractive yield.
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120.80p
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.
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144.00p
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?
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0.00%
Initial chargeSome 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!
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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).
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0.92%
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.
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2.70%
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…
The fund targets a high income (at least 10% above the European market yield) as well as capital growth through investment in large and mid-cap European (ex UK) equities. Manager Andreas Zoellinger picks stocks from amongst those buy-rated by BlackRock’s European analysts, though with an emphasis on income. There is no yield requirement for individual stocks and he will invest in both high income companies and lower yielding companies offering dividend growth, adjusting exposure to each depending on market conditions. As a result the yield and yield premium over the market can vary.
Fund summary
| Sector | Europe Excluding UK |
| Structure | UNIT TRUST |
| Launched | September, 2015 |
| Size | £1,726m |
| Yield | 2.70% |
| 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 | 0.17% |
| Annual management charge | 0.75% |
| Ongoing charges figure | 0.92% |
Allocation
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Investment process
The investment universe is large and mid-cap European equities with a market cap of above £1bn, around 300-350 stocks. Stocks are allocated into four sectors: Consumer, Financial, Healthcare and Industrial. Each sector is covered by a “research pod” led by a senior fund manager/analyst on BlackRock’s European equity team. Ideas are sourced from screens on valuation metrics and earnings momentum, from sector analysts and from factor and thematic trends. The analyst team carry out fundamental research on each stock, then write it up on a common template and give it a 12 month price target and a rating from 1-5 based on risk-adjusted conviction. For this fund Zoellinger looks for three types of company: (1)High yielding companies where he believes the yield is secure, often value stocks (typically around 50% of the portfolio); (2)High dividend growth companies with lower current yields - structural winners (around 20%); (3)Quality companies offering solid yields and dividend growth with a high degree of predictability (around 30%). He primarily selects these companies from those highly rated by the analysts, but he has a longer time horizon than the rest of the team as well as the income requirement, so sometimes uses some lower-rated stocks. Dividend reliability is key for Zoellinger, and he will sell any stock where he loses confidence in the next dividend.
Zoellinger has spent almost his entire career at BlackRock and was already successfully running money prior to the launch of this strategy in 2011. Since then he has consistently met the fund’s income target whilst also outperforming its benchmark. The focus on more reliable stocks has typically led to a more defensive performance profile – the fund has often lagged in rising markets but provided a degree of resilience when markets have fallen. Zoellinger's longstanding co-manager Alice Gaskell left BlackRock in 2018, but he is now supported by two income-specific analysts as well as 16 other members of BlackRock's experienced European team.
Manager research
Average monthly relative returns
- 16/17 0.00%
- 17/18 0.00%
- 18/19 0.00%
- 19/20 -0.04%
- 20/21 0.32%
Bestinvest MRI
- 3 years 0.00%
- 5 years 0.00%
- Career 0.12%
- 3 years 0.00%
- 5 years 0.00%
- Career 80.80%
Performance figures are based on the average of monthly percentage returns relative to the benchmark index.
Andreas Zoellinger
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.
Track record
Andreas Zoellinger has 2.7 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.12%. During the worst period of relative performance (from October 2020 - December 2020) there was a decline of 3% relative to the index. The worst absolute loss has been 17%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 81%.
Periods of worst performance
| Absolute | -17.00% (January 2020 - March 2020) |
| Relative | -3.00% (October 2020 - December 2020) |
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 31 July 2020
| 4.4155% | Iberdrola Sa |
| 4.0789% | Nestle Sa |
| 4.0719% | Edp - Energias De Portugal Sa |
| 4.0299% | Enel Spa |
| 4.023% | Tele2 Ab |
| 3.8958% | Zurich Insurance Group |
| 3.8599% | Lonza Group Ag |
| 3.7921% | Sanofi |
| 3.3517% | Novo-Nordisk As |
| 3.3364% | Bouygues |
| Source: Trustnet |
Sector breakdown
| Financials | 25.00% |
| Industrials | 25.00% |
| Utilities | 16.00% |
| Health Care | 15.00% |
| Consumer Goods | 11.00% |
| Telecommunications | 4.00% |
| Technology | 2.00% |
| Consumer Services | 2.00% |
| Money Market | 1.00% |
Portfolio
40-70 stocks, though typically at the lower end of this range.
Constraints
Max 5% UK equities. Target tracking error 3-8%. Target beta less than 1.