Evli launched a new equity fund, Evli Europe Growth, which invests in European quality growth companies. The fund provides an opportunity to invest in high-quality companies that are experiencing faster-than-expected growth.
Evli launched a new equity fund, Evli Europe Growth, which invests in European quality growth companies. The fund provides an opportunity to invest in high-quality companies that are experiencing faster-than-expected growth.
Quality growth companies include some of the stock market's top performers, such as Novo Nordisk, ASML and Ferrari. If you avoid these companies as an investor, you could miss a large share of the stock market's returns. However, there are very few active funds on the market that specialize in investing in quality growth companies.
”There is growing interest in quality growth strategies. There are interesting growth companies in Europe that have delivered strong returns in recent years, despite sluggish economic growth in Europe. Despite their strong performance, these companies have received less attention than US growth companies,” says Peter Lindahl, Head of Systematic Funds at Evli.
Evli Europe Growth is a sister fund to the Evli USA Growth Fund, which has attracted a lot of interest. Evli Europe Growth Fund invests its assets mainly in the equities of major European companies. The fund's investment decisions are based on academically identified factors – specific characteristics of stocks – rather than traditional market value, selecting these characteristics at any given time.
”We invest in high-quality growth companies, so quality is an important factor in equity selection. In growth, we focus on expected growth and growth momentum. For example, one measure of our ability to anticipate future growth is the company's investments in research and development,” Lindahl explains.
Aiming for a return above the market index
Evli Europe Growth aims to earn a return which, in the long term, exceeds the return of the European market index. As the fund's assets are invested in equities or equity-linked securities, the fund unit value can fluctuate very abruptly within a short period. The fund's investments carry an exchange rate risk.
”Our research shows that high-quality growth companies have historically outperformed the traditional market index. We believe that this type of equity strategy offers a higher expected return than the market index over the long term,” says Lindahl.
He also finds the return expectations for value companies over the next ten years interesting. Therefore, the harmonious co-existence of well-constructed value and growth strategies is the cornerstone of sophisticated investing.
"Our research shows that a high-quality growth stock strategy is an interesting counterpart to value and small-cap equities. These investment styles are poorly correlated with growth companies and thus significantly improve the diversification of the equity portfolio," says Lindahl.
For more information about Evli Europe Growth and the regulatory materials of the fund, such as the key information document and the fund prospectus, please visit the fund's website. Before making an investment decision, investors should familiarize themselves with the characteristics, risks, and legal materials of the fund. The value of an investment may rise or fall, and the investor may lose all or part of the capital invested.
For more information:
Peter Lindahl, Head of Systematic Funds, Evli Plc, tel. +358 9 4766 9317, peter.lindahl@evli.com
