The prospect of
Greece defaulting on its debt has long been viewed as the recipe for a
global stock market disaster. Yet some fund managers are prospering by
ignoring the risks of another financial crisis and moving more money
into European stocks.
Brian
Burrell, co-portfolio manager of the $11.5 billion Thornburg
International Value fund, increased the percentage of European stocks
such as French materials maker Compagnie de Saint-Gobain (SGOB.PA) and French construction company Vinci (SGEF.PA) in his portfolio by 10 percentage points since the end of 2014, making European stocks 65 percent of his total assets.
Now, he's reaping the rewards: with broad European stock markets up by 15 percent or more for the year to date, his fund is up 17.1 percent over the same time, a performance that ranks among the best international funds and leaves the 2.5 percent gain in U.S. stocks far behind.
At a time when the average international fund tracked by Lipper has dropped its holdings of European stocks by 1 percentage point, to an average of 43 percent, fund managers like Burrell that went the other way are outperforming.
Now, with Greece and the so-called "Troika" of primary creditors - the European Commission, the European Central Bank and the International Monetary Fund - once again at an impasse, several of these fund managers say that they are ready to double down on European stocks should the market start to sell-off if Greece does indeed default.
"People are starting to react to headlines, and that's when we start buying," said Michael Testorf, a co-portfolio manager of the $53.8 million RSQ International Equity fund.
Now, he's reaping the rewards: with broad European stock markets up by 15 percent or more for the year to date, his fund is up 17.1 percent over the same time, a performance that ranks among the best international funds and leaves the 2.5 percent gain in U.S. stocks far behind.
At a time when the average international fund tracked by Lipper has dropped its holdings of European stocks by 1 percentage point, to an average of 43 percent, fund managers like Burrell that went the other way are outperforming.
Now, with Greece and the so-called "Troika" of primary creditors - the European Commission, the European Central Bank and the International Monetary Fund - once again at an impasse, several of these fund managers say that they are ready to double down on European stocks should the market start to sell-off if Greece does indeed default.
"People are starting to react to headlines, and that's when we start buying," said Michael Testorf, a co-portfolio manager of the $53.8 million RSQ International Equity fund.
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