Spotlight on TR European Growth Trust

The TR European Growth Trust has been transformed for the better since mid 2011, when Ollie Beckett took charge.

Beckett has been with Henderson Global Investors, the trust's management group, on and off since 1995. As manager since 2005 of Henderson Horizon Pan European Smaller Companies fund, his returns have tended to be either top- or bottom-decile, but cumulatively strong. Henderson Global Investors, has one of the strongest European teams in the City.

Beckett has overhauled TR European Growth Trust's portfolio, cutting out almost all its larger companies and Eastern European exposure.

The median market capitalisation is £900 million, which is significantly lower than the other three trusts, and he particularly favours companies capitalised at between £800 million and £400 million, as research coverage is so much sparser than it is further up the size spectrum. He does, however, hold a few much larger companies.

Beckett looks for companies where earnings momentum is improving, and thinks this no longer implies a bias towards domestically oriented businesses. He has also moved on from "loading up on peripheral markets", though he remains positive on Italy.

There are moves afoot that will benefit Europe"Ollie Beckett

He says his core overweights are Germany, Switzerland and France, as companies are generating the highest returns there.

Sector-wise, he likes technology, "where a lot of exciting growth should occur" and industrials, "as we remain broadly positive on the economy".

He is more worried about deflationary risks than some of his competitors, but he says: "In Draghi [the European Central Bank governor] we trust. I am sure there are moves afoot that will benefit Europe as a whole."

Beckett is hoping for share price gains of 10-15% this year, which is a lot less than last year. However he adds that equities could be pushed higher than they deserve, because they are more attractive than bonds or cash.