12th May 2015 11:47
LONDON (Alliance News) - European Assets Trust NV on Tuesday said it performed well against its benchmark index in the first quarter of 2015.
The trust, which aims to generate capital growth by investing in small and medium-sized companies in Europe outside the UK, said its net asset value increased by 13.9% in sterling terms on a total return basis in the three months ended March 31, while the Euromoney European Smaller Companies (ex UK) Index rose 11.3%.
Net asset value increased by 22.1% in euro terms on a total return basis, while the Euromoney European Smaller Companies (ex UK) Index rose 19.4%.
NAV amounted to EUR368.8 million at the end of March.
Sterling returns were damped by a weaker euro, the trust said, due to the beginning of the European Central Bank's quantitative easing programme, and because "Europe is later in its economic cycle and therefore also its monetary cycle than the UK".
"The strong performance reflected the increasing momentum in the modest recovery in the Eurozone as lower oil prices, a weakening Euro, and improving confidence, all led to some positive economic surprises, which contrast with the rest of the world's data, particularly the US and China. This has proven to be a boost to smaller companies in Europe, which have a strong domestic and cyclical bias," the trust said in a review.
"Nonetheless the strength of the market has surprised us. While in aggregate, European valuations do not look expensive, and certainly relative to other asset classes, they look attractive, we need profit levels to improve from here to see further market progress. Leading indicators suggest that this could happen, but we will continue to invest your capital conservatively and trust that this will deliver strong results over the long term for our shareholders," the trust said.
The trust's shares were down 0.7% at 1,122.50 pence on Tuesday.
By Samuel Agini; [email protected]; @samuelagini
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