TR European Growth Trust’s objective is to achieve capital growth by investing in smaller and medium-sized
companies in Europe (ex-UK). It aims to achieve a net asset value total return in excess of the benchmark
Euromoney Smaller Europe ex-UK index (in sterling terms).
TR European Growth Trust (TRG) has seen its share price de-rate substantially over the past 18 months, from a c 3% premium to NAV to a c 15% discount, following a period in which its small-cap value style of investing has been out of favour with investors. However, its NAV has risen c 13% year to date, with lead manager Ollie Beckett taking advantage of depressed valuations in smaller European companies whose growth potential he believes is underappreciated by the wider market. The portfolio is diverse, with c 140 holdings broadly spread by country and industry sector. TRG has a more value-oriented investment approach than its peers and is more exposed to stocks at the lower end of the market capitalisation spectrum, which have greater potential to grow exponentially. The largest positions rarely exceed c 2%, which limits stock-specific risk, while a well-covered c 2.5% dividend yield provides support for total returns in periods of market volatility.