Frankreich und Europa - eine Analyse

Mit Argusaugen blickte ganz Europa nach Frankreich. Nun ist Monsieur Macron zum Präsidenten der Grande Nation gewählt worden. Was bedeutet das für Europa? finanzwelt sprach exklusiv mit Camilla Nathhorst Odevall, Expertin für europäische Aktien und leitende Managerin des Edmond de Rothschild Europe Midcaps und Benjamin Melman, Leiter Asset Allocation und Sovereign Debt bei Edmond de Rothschild Asset Management.

finanzwelt: What are your expectations to Mr. Macron after winning the French election?

Melman: As polls suggest German elections won’t bear any negative surprise, Macrons’s victory is clearing the European political risk for the coming months which had dramatically increased on French and European assets since the UK referendum and the US elections. This is clearly positive noticeably for Eurozone equities, and subordinated debts. Indeed, for more than one year, many non-European investors have been significantly sellers of European equities, flows became positive only very recently. As growth is accelerating (and could be close to 3% according to the latest surveys) and EPS are strongly rising, as ECB is remaining very accommodative, there is room for a positive momentum trend on Eurozone equities as it is still undervalued compared to the usual discount vs US equities. Nevertheless, we must keep in mind the Italian political picture remains highly unclear and could lead to a success of the Five Stars Movement during the coming elections (probably next year). We can suspect the European political risk factor will resume when the Italian elections are appearing in the Agenda.

finanzwelt: It seems, that Europe as whole is coming back. Where do you see the most attractive sectors?

Nathhorst Odevall: The optimism will spread. Especially European investors will put more money in equities. And this will allow small companies to go on developing higher-than-average. Their earnings growth is most of the time higher than blue chips’. And since small caps often focus on the European market, they profit from the domestic growth.

finanzwelt: Most of us watch the large firms. Why do you select the smaller companies?

Nathhorst Odevall: Smaller companies offer a good source of diversification in an asset allocation.

Small & Mid Cap companies offer superior Earnings Growth:

European midcaps offer a differentiated universe of innovative and fast growing niche players and technology leaders, they are more reactive and agile, thus able to adapt rapidly.

Small & mid cap companies Outperform large caps over the long term

Small and mid-cap companies is a more cyclical asset class. They tend to outperform in times of good growth momentum in the markets. Small and mid-cap companies are the most likely to benefit from M&A.

Small and midcaps still offer an Attractive Valuation

Small and mid-cap companies currently trade with a discount to their historical premium to large caps. They generate strong cash flows and offer superior balance sheet.

finanzwelt: Could you explain the strategy of the Edmond de Rothschild Europe Midcaps; what about the performance in the last years?

Nathhorst Odevall: Edmond de Rothschild Europe Midcaps focus on Midcaps with a market capitalization ranging from €500M to €5 bn.

The strategy follows a thorough, sustainable and proven selection process, based on fundamental analysis and qualitative research.

The conviction-led approach is looking for :

• High Earnings Growth at all phases in the cycle (rising turnover, improved margins potential, optimization of balance sheet).
• High Management Quality (tracking management strategy, ambition, reliability). Fund managers visit 250 company yearly.

The investment process leads to a concentrated portfolio with 40 to 60 stocks (out of a universe of 900).

The investment team (Camilla Nathhorst Odevall and Ariane Hayate) has a proven track record with a collaboration for 9 years. The fund was created in December 1994. Since inception, A share has delivered a performance of 503% compared to 353% for its benchmark (Stoxx Europe Small 200 NR). The fund outperformed the index during the last 3 years and started the year 2017 on a strong performance (12% for A share as of 28/04/2017) and 14.09% including the latest validated NAV (as per 9/5/2017).