Premier Euro Growth fund to get new powers

Premier is planning to introduce UCITs III powers on its European Growth trust to take advantage of manager Rupert Morrell’s derivatives experience.

Subject to FSA and shareholder approval, Premier hopes to introduce the new powers which will include selling index futures and taking ‘synthetic short’ positions.

However, the group is keen to stress the new fund will be neither an Alpha fund nor a 130/30 product but will retain its position as a traditional long fund with added flexibility. The new powers will be used for risk reduction on the portfolio not enhanced exposure, Morrell says.

Morrell’s background is well suited to using the new powers as part of his 13 years in the European investment management industry have been spent running hedge funds.

He took over the Premier European Growth fund on June 13 2005, when he completely overhauled 90% of the portfolio, since which time it has returned 71.5% and is ranked 11 out of 105 funds in the IMA Europe ex UK sector.

He says: “The fund had a very good track record but I decided make changes as I am much more aggressive than my peers in terms of turnover and position sizes. This is a very actively managed fund run using a core/trading strategy. I have around 70pc in core names with 30pc in trading companies.

"Managers generally look at the medium to long term but I consider the short term where they are some fantastic trading opportunities. We are bottom up so are not looking at an index and stocks are not picked on a relative basis.”

The fund has between 35-45 holdings and is an all cap fund with a mid cap bias. Key successes in the past year have included Swedish company Unibet, which is one of the largest online gaming companies in Europe.

“Online gaming was hit following the restrictions in the US but I found you could get European companies which have no US exposure and these worked well for the fund,” Morrell says.

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