Long-term Investment Approach
Warren Buffett is regarded as a pioneer for a long-term investment strategy based on counter-cyclical approaches. The MFS Meridian Funds – European Value Fund adopts a similar approach by investing in stable business models while avoiding high-risk assets. With this strategy, it significantly outperforms the Stoxx Europe 600.
Investment Strategy
The fund emphasizes detailed analyses of company quality and refrains from speculative forecasts. Priority is given to long-term investments in solid companies, with loss risk minimized by excluding overvalued stocks.
Portfolio Composition
MFS Meridian invests in reputable companies like Nestlé, Richemont, and Sanofi, known for stable business development and reliable dividends. The portfolio features a dividend yield of 2.6% and a price-to-earnings ratio (P/E) of 15.5, with an average return on equity of 19%.
Market Trends and Opportunities
Currently, European stocks are experiencing growing popularity again, particularly small and mid-caps, indicating a potential trend reversal. Valuation discrepancies between US and European stocks provide investors with attractive entry opportunities.
Other Funds with Similar Strategy
The Deka-European Value Fund also focuses on undervalued European stocks and pursues active management for risk management.
In summary, European value equity funds offer a stable, long-term successful investment opportunity by focusing on substance values and counter-cyclical strategies.