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European All Cap
The strategy was launched in June 2021. It invests in the shares of between 30-45 companies in the European region (including the UK).
You can see all of the companies that this strategy invests in by filtering on our Portfolio Explorer tool.
- We define investment risk as losing clients’ money – this means we focus on looking after your money as well as growing it
- Companies must contribute to sustainable development and make a positive impact towards a more sustainable future. Portfolio Explorer >
- We invest in high-quality companies with exceptional cultures, strong franchises and resilient financials. How we pick companies >
- We avoid companies linked to harmful activities and engage and vote for positive change. Our position on harmful products >
Quarterly updates
Strategy update: Q3 2024
European Sustainability strategy update: 1 July - 30 September 2024
The performance of the portfolio looks to have stabilised following a relatively weak start to 2024. As market turbulence around the uncertainty of interest rates and geopolitics appears to settle, we remain excited by our holdings, many of which we believe are very attractively valued for their long-term growth potential.
Three new companies were added to the portfolio during the quarter. The first, ASML (Netherlands: Information Technology), is the global leader in lithography machines used to produce chips for semiconductors. Its culture is exceptional for its focus on engineering, with almost 40% of employees working in research and development with a budget of EUR4 billion in 2023.1
We also bought another Dutch-listed, but global-facing company, Wolters Kluwer (Netherlands: Industrials), which provides professional information, software and services to a diverse range of end customer markets. Most of Wolter Kluwer’s sales are on a repeating cycle, with pricing linked to inflation. This enables stable levels of cash to come into the business and also allows for consistent investment into new products, such as their CCH® Tagetik solution, which helps companies measure and report on their environmental performance.
The final company added to the portfolio was Knorr Bremse (Germany: Industrials), a leading provider of brakes for rail and commercial vehicles. A new CEO, Marc Llistosella, has brought a renewed focus on culture, operational efficiencies and additional growth opportunities around automation and digitalisation.
During the quarter, Bechtle (Germany: Information Technology) and Teqnion (Sweden: Industrials) were sold due to reduced confidence in the sustainability and scalability of the business.
Addtech (Sweden: Industrials) and Indutrade (Sweden: Industrials), both experienced strong income growth in the quarter. Addtech and Indutrade acquire other companies which provide niche or specialised products and allow them to operate independently. They then use their cash and income to acquire more companies. Addtech and Indutrade both benefit from long-term growth opportunities within renewable energy, automation and electrification, in which their components are used.
We visited both Addtech and Indutrade on a research trip to Stockholm during the quarter, as well as ten other companies. This included other portfolio holdings, such as access solutions provider Assa Abloy (Sweden: Industrials), the 153-year-old bank Handelsbanken (Sweden: Financials), the world’s leading manufacturer of air compressors Atlas Copco (Sweden: Industrials), and specialised software business acquirer Vitec Software (Sweden: Information Technology).
The opportunity to meet with company management on their ‘home turf’ is invaluable; it is much easier to get a sense of how culture and people have shaped a company and its future return profile when sitting within their offices; or, in the case of Atlas Copco, 20 metres below their office in a test mine. We continue to find excellent investment ideas by focussing on the impact that outstanding people can have on businesses with strong business franchises and resilient financials.
1 Source: ASML Annual Report 2023
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Strategy update: Q2 2024
European Sustainability strategy update: 1 April - 30 June 2024
Following an improvement in the strategy’s performance in late 2023, the first half of 2024 has been relatively weak. Geopolitical and monetary policy uncertainty (e.g. interest rates) continue to concern markets, and the strategy was impacted by volatility (rapid and unpredictable price fluctuations) from a small number of holdings.
This volatility brought opportunities to build positions in companies we believe are well-positioned for the long term, such as our IT services holdings, Endava (United States: Information Technology) and EPAM Systems (United States: Information Technology). Despite short-term pressure on customer budgets, the long-term opportunity of digitalisation remains an exciting area of growth for both companies.
We also added to a number of existing holdings, including Dino Polska (Poland: Consumer Staples), admiring their consistent approach in a fast-growing retail market, Vitec Software (Sweden: Information Technology) which has strong financials and the global leader in locks, Assa Abloy (Sweden: Industrials).
We sold several positions, including ALK-Abellò (Denmark: Health Care), Admiral (United Kingdom: Financials) and Spirax Group (United Kingdom: Industrials) due to valuation concerns and Alfen (Netherlands: Industrials) after issues around stock reduction, management change, and slowing end customer markets.
We bought Ashtead Group (United Kingdom: Industrials), which rents construction and industrial equipment to a range of customers in the United States and further afield. Ashtead is run by an excellent management team who have reinvested income into the business. They have consolidated the market of equipment rental services by buying small-scale providers. The business model of equipment rental favours large-scale businesses with geographic reach, a wide range of products, and excellent customer service. We believe Ashtead is in a strong and still strengthening position. They should also benefit from strong sustainability opportunities (tailwinds), not only by helping to maximise equipment life and responsible disposal, but also by leasing equipment needed in infrastructure investment across areas such as semiconductors, electric vehicles (EVs), and renewable energy.
We also bought Air Liquide (France: Industrials), which supplies industrial gases such as oxygen, argon, hydrogen, and helium to a range of end customer markets, including healthcare, manufacturing, and electronics. The company is well-positioned within a market without too many competitors; pricing is both fair and linked to inflation, and the products are often essential for their customers’ day-to-day operations. In addition to building on their century-old core business, Air Liquide are exploring new areas of growth in carbon capture and green hydrogen. It has invested in 200 megawatts of planned hydrolyser capacity in Normandy as part of their target to invest EUR8 billion to reduce emissions from hydrogen production by 20351.
Amid the volatility, it was pleasing to see signs of a recovery in the portfolio’s largest position, Roche (Switzerland: Health Care). Following a long period of reducing stock after the covid-19 pandemic, Roche is positioned well to benefit from its market-leading diagnostics product offering, which consists of 600 tests and is planned to grow by 40 new tests each year. Strong growth and cash flows (the movement of money into and out of a business) from diagnostics support Roche’s long-term drug development and committed research & development (R&D) spending, including a 100-strong drug pipeline addressing unmet medical needs in a wide range of areas such as oncology, obesity, and multiple sclerosis.
Looking through short-term volatility and uncertainty, we remain confident in the long-term prospects of the portfolio and are excited by our exposure to high-quality companies with excellent sustainability opportunities.
1 Source: Stewart Investors investment team and company data
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Strategy update: Q1 2024
European All Cap strategy update: 1 January - 31 March 2024
Following stronger performance in the last quarter of 2023, the first quarter of 2024 has been relatively flat. The strategy portfolio performance was behind its benchmark, the MSCI AC Europe Index, which was boosted in part by easing monetary policy and hopes for a soft economic landing.
During the quarter we took the opportunity to build up some of the newer positions we added in 2023, including Teqnion (Sweden: Industrials), the founder owned, serial acquirer of diverse businesses; Nexans (France: Industrials), the maker of electrical cabling used in renewable energy, and DiscoverIE (United Kingdom: Industrials), a manufacturer of niche electronics and manufacturing businesses. We also took the opportunity to add to our investment in Endava (United Kingdom: Information Technology) which suffered a sharp reduction in share price over market concerns about weaker discretionary spend from customers. While the company may face short-term uncertainty due to the overall economic environment, we feel confident backing its culture, management and long-term growth potential.
Judges Scientific (United Kingdom: Industrials), the largest position in the strategy, continues to demonstrate resilient growth, and we remain excited about its potential, given it is still early on in its growth journey.
Valuation concerns and a need to manage position sizes led us to trim our investments in Ringkjøbing Landbobank (Denmark: Financials), Nemetschek (Germany: Information Technology) and Adyen (Netherlands: Financials). Adyen had a particularly strong quarter, rising more than 145%1 since a period of weakness last year.
Over the course of the quarter, we sold Komerční banka (Czech Republic: Financials) to make room for two faster growing eastern European companies: Dino Polska (Poland: Consumer Staples), low-cost grocery retailer, and Allegro (Poland: Consumer Staples), Poland’s number one e-commerce platform that is expanding into Eastern Europe.
As ever, we continue to focus on long-term capital preservation as the bedrock of capital growth, and on ensuring the portfolio can weather most economic environments. Looking forward, we are excited by the quality, and diverse nature of the companies we hold, and their ability to contribute to, and benefit from, sustainable development.
1 Source: Factset
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Strategy update: Q4 2023
European All Cap strategy update: 1 October - 31 December 2023
Strong performance in Q4 propelled overall performance for the year convincingly into positive territory. Nonetheless 2023 will be remembered for market turbulence and fluctuations in the performance of the strategy.
The period from August through to October was especially difficult. Many macroeconomic worries that had weighed on equity markets at different times earlier in the year came to a head: monetary and fiscal policy tightness across European economies, the threat of recession and stagnation, falling real wages, declining household savings and spending, vulnerable housing markets, and slowing demand from China.
However, sentiment improved markedly in the final quarter as a consensus emerged that interest rates have peaked. Yields plummeted and valuations rose as markets celebrated a more benign inflation outlook and the possibility that the monetary policy tightening cycle is over, the industrial cycle turning, and demand recovering.
All but six of the 43 portfolio holdings rose over the quarter. Valuation concerns and a need to manage position sizes led us to trim positions in Admiral (United Kingdom: Financials), bioMérieux (France: Health Care), Atlas Copco (Sweden: Industrials), DHL Group (Germany: Industrials), and Infineon Technologies (Germany: Information Technology). We also sold the small remaining position in Rational (Germany: Industrials). The company has a limited range of products which we are concerned could face growing competitive and pricing pressures.
We made no new purchases, but took advantage of attractive valuation opportunities to increase shareholdings in EPAM Systems (United States: Information Technology), Jerónimo Martins (Portugal: Consumer Staples), Alfen (Netherlands: Industrials), Elisa (Finland: Communication Services), and Judges Scientific (United Kingdom: Industrials).
Over the course of the year our main concerns were to: 1) maintain and improve portfolio diversification and defensiveness; 2) maintain valuation discipline; and 3) take advantage of compelling valuation opportunities. In total we sold out of five holdings and introduced seven new names into the portfolio.
We replaced a handful of industrial companies because they became too expensive and/or their competitive positioning less convincing to us. They included Beijer Ref (Sweden: Industrials), Nibe Industrier (Sweden: Industrials), Tomra (Norway: Industrials), and Rational (mentioned previously). We also sold Diploma (United Kingdom: Industrials) to make room in the portfolio for DiscoverIE (United Kingdom: Industrials), a somewhat similar company to Diploma, although earlier in its evolution, and less expensive.
The four industrial companies we brought into the portfolio were Nexans (France: Industrials), Teqnion (Sweden: Industrials), Assa Abloy (Sweden: Industrials), and Addtech (Sweden: Industrials). All apart from Nexans have contributed positively to performance. The other two new positions were in EPAM Systems (mentioned previously) and Endava (United States: Information Technology). Both looked beaten up when we bought them, and both have strengthened since.
The most disappointing aspect of performance in 2023 was the damage done by the health care holdings, many of which were among the larger portfolio positions, precisely because we expect them to be resilient and steady compounders over the long term.
Three of the five largest detractors from performance were DiaSorin (Italy: Health Care), Roche (Switzerland: Health Care), and Carl Zeiss Meditec (Germany: Health Care). The other two big detractors were Alfen (Netherlands: Industrials) and Tecan (Switzerland: Health Care). We could have been less eager and slower adding to all five holdings as they fell.
The top five performance contributions in 2023 came from holdings in Inficon (Switzerland: Information Technology), Atlas Copco, DHL Group, Teqnion (all mentioned previously), and Spectris (United Kingdom: Information Technology); we reduced shareholdings in all except Teqnion and Spectris.
We have no ability to forecast markets, though it wouldn’t surprise us if 2024 presents a complex market environment with contradictory forces and signals. Optimism about equities may be running higher than it has for a couple of years, but markets have been swift to price in lower interest rates and some company valuations are already starting to look stretched. Easier financial conditions may be on the horizon, but money and credit remain tight in many economies. We may not yet have seen the full impacts of the tightening cycle we have been through. If economic activity fails to pick up, or contracts, company earnings could come under renewed pressure, and balance sheet strength and liquidity could be tested.
We enter 2024 with a portfolio of what we believe to be adaptable, high-quality, great sustainability companies, with consistent cash flow capabilities, and strong competitive positions in different market segments. The leaders of these companies understand the value of staying close to their customers. They steward their balance sheets carefully. They ensure their companies are as well placed to deal with emergent risks as they are to capitalise on long-term opportunities.
We will stay focused on the long-term, fundamental prospects of the companies we hold and those we are watching closely. Although we like the composition and shape of the portfolio, we will keep searching for companies that might improve overall portfolio risk-return characteristics. We will be vigilant about trimming holdings that become expensive and adding to those that present compelling valuations opportunities.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Proxy voting
Proxy voting: Q3 2024
European All Cap proxy voting: 1 July - 30 September 2024
Proxy voting by country of origin
Proxy voting by proposal category
During the quarter there were 101 resolutions from five companies to vote on. On behalf of clients, we voted against three resolutions.
We voted against remuneration motions at Ashtead Group as we were concerned about excesses in CEO salary. (two resolutions)
We voted against proposals related to amendments to articles (rules and regulations that govern the company's operations) at DiaSorin as the company did not provide enough information on the amendments. (one resolution)
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Proxy voting: Q2 2024
European Sustainability proxy voting: 1 April - 30 June 2024
Proxy voting by country of origin
Proxy voting by proposal category
During the quarter there were 583 resolutions from 30 companies to vote on. On behalf of clients, we voted against 15 resolutions.
We voted against proposals on transaction of business at Alcon, Naturenergie, INFICON, SFS and Tecan as they did not provide enough information about the proposals. We wanted to avoid giving them unrestricted decision-making power without sufficient clarity. (five resolutions)
We voted against remuneration motions at Assa Abloy. The company often buys other businesses through acquisition and we believe this type of business should reward management on financial performance as well as the number of shares they own. (two resolutions)
We voted against the appointment of the auditor at bioMérieux, EPAM Systems, Indutrade, SFS, Spirax Group and Unilever as they have been in place for over 10 years and the companies’ have given no information on intended rotation. We believe rotating an auditor on a relatively frequent basis (e.g. every 5-10 years) helps to ensure a fresh pair of eyes are examining the accounts, and follows best practice. (six resolutions)
We voted against remuneration motions at Indutrade as we were concerned about excesses in CEO salary increases. (one resolution)
We voted against a shareholder proposal about board declassification at EPAM Systems as we do not believe it is necessary for all directors to stand for election annually and have concerns that this could destabilise the board by allowing excessive turnover. (one resolution)
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Proxy voting: Q1 2024
European All Cap proxy voting: 1 January - 31 March 2024
Proxy voting by country of origin
Proxy voting by proposal category
During the quarter there were 206 resolutions from 9 companies to vote on. On behalf of clients, we voted against 10 resolutions.
We voted against an amendment to company articles at Belimo. We also voted against a transaction at Belimo and Sika. (three resolutions)
We voted against the appointment of the auditor at Roche as they have been in place for over 10 years. We believe rotating an auditor on a relatively frequent basis (e.g. every 5-10 years) helps to ensure a fresh pair of eyes are examining the accounts and follows best practice. We also voted against excessive executive pay. (six resolutions)
We voted against a shareholder proposal concerning a change of payment software at Handelsbanken as we believe the day-to-day operation of the business is best left up to the Board and management. (one resolution)
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Proxy voting: Q4 2023
European All Cap Sustainability proxy voting: 1 October - 31 December 2023
Proxy voting by country of origin
Proxy voting by proposal category
During the quarter there were 28 resolutions from two companies to vote on. On behalf of clients, we didn't vote against any resolutions.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Sustainable investment labels help investors find products that have a specific sustainability goal. This product does not have a UK sustainable investment label as it does not have a non-financial sustainability objective. Its objective is to achieve capital growth over the long-term by following its investment policy and strategy.
Portfolio Explorer
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For illustrative purposes only. Reference to the names of example company names mentioned in this communication is merely for explaining the investment strategy and should not be construed as investment advice or investment recommendation of those companies. Companies mentioned herein may or may not form part of the holdings of Stewart Investors. Holdings are subject to change.
Certain statements, estimates, and projections in this document may be forward-looking statements. These forward-looking statements are based upon Stewart Investors’ current assumptions and beliefs, in light of currently available information, but involve known and unknown risks and uncertainties. Actual actions or results may differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements. There is no certainty that current conditions will last, and Stewart Investors undertakes no obligation to correct, revise or update information herein, whether as a result of new information, future events or otherwise.
Source: Stewart Investors investment team and company data. Securities mentioned are all investee companies* from representative Asia Pacific All Cap Strategy, Asia Pacific & Japan All Cap Strategy, Asia Pacific Leaders Strategy, European All Cap Strategy, European (ex UK) All Cap Strategy, Global Emerging Markets (ex China) Leaders Strategy, Global Emerging Markets Leaders Strategy, Global Emerging Markets All Cap Strategy, Indian Subcontinent All Cap Strategy, Worldwide All Cap Strategy and Worldwide Leaders Strategy accounts as at 30 September 2024. *Assets that the strategies may hold which an active decision has not been made, and sustainability assessment does not apply, include cash, cash equivalents, short-term holdings for the purpose of efficient portfolio management and holdings received as a result of mandatory corporate actions. Holdings of such assets will not appear on Portfolio Explorer.
The Stewart Investors supports the Sustainable Development Goals (SDGs). The full list of SDGs can be found on the United Nations website.
Source for Climate Solutions and impact figures: © 2014–2024 Project Drawdown (drawdown.org). Source for Human Development Pillars: Stewart Investors investment team.
Source for climate solutions and human development analysis and mapping: Stewart Investors investment team. Contributions are defined by the team as demonstrable contributions to any solution, either direct (directly attributable to products, services or practices provided by that company), or enabling (supported or made possible by products or technologies provided by that company).
Investment terms
View our list of investment terms to help you understand the terminology within this document.
Fund data and information
Fund prices and details
Click on the links below to access key facts, literature, performance and portfolio information for the funds and share classes available in this jurisdiction:
Stewart Investors European All Cap Fund
| Fund name | Fund type | Currency | Price | Daily change | Price date | Factsheet |
|---|---|---|---|---|---|---|
| Stewart Investors European All Cap Class E (Acc) | Irish UCITs | EUR | 9.77 | -0.33 | 29 Nov 2024 | |
| Stewart Investors European All Cap Class E (Acc) | Irish UCITs | GBP | 9.43 | -0.44 | 29 Nov 2024 | |
| Stewart Investors European All Cap Class E (Acc) | Irish UCITs | USD | 8.48 | -0.20 | 29 Nov 2024 | |
| Stewart Investors European All Cap Class VI (Acc) | Irish UCITs | EUR | 9.71 | -0.34 | 29 Nov 2024 |
Share prices are calculated on a forward pricing basis which means that the price at which you buy or sell will be calculated at the next valuation point after the transaction is placed. Where a fund price is marked XD, this means that the fund is currently Ex-Dividend. Past performance is not necessarily a guide to future performance. The value of shares and income from them may go down as well as up and is not guaranteed. Please note that the yield quoted above is not the historic yield. It is considered that the yield quoted represents the current position of investments, income and expenses in the fund and that this is a more accurate figure. Investors may be subject to tax on their distribution. The yield is not guaranteed or representative of future yields. You should be aware that any currency movements could affect the value of your investment. The Funds within the First Sentier Investors Global Umbrella Fund plc (Irish VCC) are denominated in USD or EUR.
Strategy and fund name changes
As of end of 2024, please note that Stewart Investors strategies and the Funds within the UK First Sentier Investors ICVC and First Sentier Investors Global Umbrella Fund plc (Irish VCC) have been renamed. Please refer to note below for further information.
