The manager taking on Bolton's mantle

By Emma Thelwell Feb 14, 2006

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Last week, we took a look at the extraordinary record of fund manager Anthony Bolton. He’s a tough act to follow, given his consistent outperformance over the last 25 years, but Tom McCarron looks up to the job, says John Greenwood in The Sunday Telegraph.

He took over the management of Bolton’s Fidelity European Values in 2001 and has managed to return more than 177% over the last three years thanks both to clever stock picking and a good level of gearing (investment trusts can borrow money to invest, something unit trusts are not allowed to do, and McCarron’s can gear up to 17% of net assets).

Despite their recent good run, McCarron still sees value in Europe’s reasonably rated markets and – rather like his predecessor – looks for unrecognised growth, out-of-favour companies, and recovery stories in his search for long-term capital growth. Back in July, he saw good opportunities in pharmaceuticals even as the rest of the market was shunning the sector. His top holdings now include Novartis, Europe’s second-biggest drugmaker.

The fund’s gearing makes it relatively high risk and it also trades at a small premium to its peers. But don’t let that put you off, analyst Charles Cade of Wins Investment Trusts told Greenwood. This is no ordinary fund. McCarron has managed to outperform in both positive and negative market conditions and is not frightened of investing in peripheral markets or smaller companies. All this means that his fund deserves and “can sustain a premium rating”.

Contact: 01732-361144, www.fidelity.co.uk

Fidelity European Values investment trust top ten holdings

Name of holding                         % of assets

Novartis AG                                 5.3%
Sap AG                                       3.3%
Total SA                                     2.8%
Euro Aero Defence & Space            2.5%
Sanofi-Aventis                             2.5%
AstraZeneca                                2.4%
Koninklijke Philips Electronics NV      2.4%
Ing Groep NV                               2.3%
Société Générale                          2.1%
Basf AG                                      2.0%

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Published in Investments | More articles by Emma Thelwell

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