“The indiscriminate selling of European equities has created a window of opportunity for bottom-up stockpickers in companies whose share prices have been dragged lower by little more than negative sentiment,” said Crockford.
“While it is impossible to pinpoint the end of this volatile period, and emerging woes will no doubt continue to take their toll on European equities, for selected stocks, it is time to start to capitalise on this volatility, rather than run for the hills.”
In order to benefit from European macro drivers, Crockford has been adding to positions in electrical, credit rating and renewables-focused stocks– the latter of which, Gamesa Corporacion Tecnologica, features in his top 10 holdings at 2.9% of the fund.
However, while for some the hikes and troughs of the market are throwing up buy-and-sell opportunities at every turn, others are opting a more cautious approach.
Edelsten prefers to stay more removed from the action, keeping his distance while ensuring that his investments are able to resist short-term market fluctuations.
“We do not want a portfolio whose fortunes are influenced by interest rates or markets, we want one that is resilient,” he expanded.
“We try to invest in companies that will grow whatever the weather – when the economy is doing well they do not do much better than if the economy was absolutely dreadful.”
That said, having sold out of his positions in Chinese banks early in Q2, Edelsten is finding some openings presenting themselves amid the choppiness.
“Everyone got overexcited about China,” he said. “Sentiment has gone from the overexcitement over the Shanghai Stock Exchange boom to the gloom that we are seeing now – people tend to overdo it either way. We sold our Chinese bank holdings in April, and, with all the banks having fallen 30% since then, started buying them back a couple of weeks ago. Having sold our Bank of China shares, we have since bought the Industrial and Commercial Bank of China.”
