European Opportunities Trust

Investment Process

The trust invests mainly in large and mid-cap European (including UK) equities. Manager Alexander Darwall looks for growing companies with high margins that he believes can sustain this growth over the long term. Typically they will offer superior, differentiated products or services and be macro-indifferent - able to prosper in a range of economic scenarios. These companies also have high visibility of earnings, strong cash generation and a strong competitive position. Darwall also looks for management with a proven track record and strong corporate governance. Ideas are generated through reading company news and meeting management. The team has over 200 meetings each year, and will often verify a company by speaking to its network of suppliers and customers. Stock selection is purely bottom-up, though portfolio companies will often have exposure to “super-macro” themes – long-term growth trends in areas such as technology. Darwall is insensitive to valuations and the portfolio can be expensive. He often takes small positions in stocks whilst he is building up the investment case. However, once he has confidence in a business he typically takes a large position and holds it for a number of years.