BlackRock Inc has launched its BlackRock European Equity Income Fund (the Fund) which offers Hong Kong investors exposure to European dividend income stocks.
Europe continues to be an area of focus with the European Central Bank’s quantitative easing (QE) program boosting corporate earnings and capital market growth in the region.
The fund seeks an above-average income return from equity investments primarily in Europe without sacrificing long term capital growth.
The fund’s investment approach is disciplined and flexible across the economic cycle, its focus on avoiding dividend risks, investing when dividends are secure, which aims to deliver a reliable and growing income above that of the European Equity Market. At the same time, a strong focus on valuation and risk control has helped generated strong resilience against falling markets.
Since the strategy launched in December 2010, the Fund has been considerably less volatile than the market, generating strong returns (+93.5% cumulative return since inception, class A2 EUR, net of fees to end May 2015) via premium yield and dividend growth from high quality companies.
“The European economy is well on the road to recovery. Overall, we are positive on the prospects for European equities and on the income opportunities available in the market. Today many high quality companies are paying safe cash dividends which can grow, across a number of sectors. At the same time, there are some specific sectors in European equities that carry dividend risk, or are overvalued and therefore need to be avoided, using our flexible strategy,” says Geskel, portfolio manager on the European equity team.
Andreas Zoellinger, portfolio manager on the European equity team adds: “The QE expansion has benefited European equities, as debt costs have fallen. The weaker Euro is especially beneficial for companies which generate their earnings internationally and the lower oil price is also positive. The resurgence in European company earnings is key to the recovery and economic momentum is gathering pace. Given the fund’s objectives, we will not compromise on yield delivery and will continue to focus on quality stocks at the appropriate valuation and resilience in falling markets.”