Columbia Threadneedle’s head of European equities Philip Dicken has retained the AAA rating he regained last month, after a strong start on the Threadneedle European Smaller Companies fund he took on in last year.
Over 12 months to the end of September, Dicken has returned 16.7%, double the benchmark Emix Smaller European Companies ex-UK’s 8.4%. That continues a strong run under Heslop and Nichols, with the fund up 28.8% over three years, well ahead of the benchmark.
Dicken has a bias towards industrial stocks, which make up over a quarter of the portfolio. Building materials group Kingspan (KGP) is the largest holding and has rallied 42% in 2020.
Eurofins Scientific (ERF.PA), an international group of laboratories, and speciality chemicals company Sika (SIKA.SWX) are also top holdings.
In his last quarterly update, Dicken said the outbreak of coronavirus meant ‘previously fragile business models may now prove unsustainable’ which will impact some small businesses and particularly employment in the hospitality and travel sectors.
‘We favour companies that have a competitive advantage and pricing power generated by brands, patented processes, regulatory barriers to entry, and strong market positions,’ he said.