But one Luxembourg fund is outperforming the rest

Equities in Europe had mixed fortunes in 2003 and the Fortis L Fund Equity Best Selection Euro aimed to capture all of the upside. The fund is said to have made its best gains during the summer, through its limited selection of around 30 euro-area shares.

The Luxembourg-based product is a sub-fund of the Fortis L Fund and showed a return of 18.61 (net of the 1.5 per cent management charge) in August 2003 from the beginning of the year. This is 5.78 per cent more than its benchmark, the MSCI EMU index. The fund has a high volatility rate of 21.1 per cent.

The fund is managed in Paris by a team of four managers with over six years’ experience. Under the guidance of European shares manager Gilles Meshaka since June 2002, the fund has grown in size to €218.7 million. He employs a bottom-up investment process that selects the best investments from the Fortis European equity funds.

Notable performers in the fund’s portfolio last year included Vivendi Universal, which managed to improve its financial status following an agreement reached with Vodafone over the division of communications company SFR. Italian bank SanPaolo IMI also continued its stay as one of the major members in the fund’s top ten.

The fund’s management is positive on prospects for next year, though makes some warnings. It says that while investments and company confidence are rising, unemployment rates and consumer confidence are the weak links on both sides of the Atlantic. This could curb economic recovery.

It adds that in the longer term economic reform in Europe and the decrease of money supply in the United States, along with the country’s huge current account deficit, are causes for concern. However, Fortis believes that recent positive data coming from the US gives reason to believe in an ongoing recovery.

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