The distressed Eurozone has been a difficult hunting ground for fund managers, but Fabio Di Giansante returned 27.2% over the last three years, nearly double that of the MSCI EMU benchmark. This performance on the Pioneer Funds Euroland Equity fund has been achieved with slightly lower volatility than the index.
His style has 75% exposure to what are viewed as core holdings and 25% in positions that look to capture shorter term opportunistic trends. The core element consists of quality businesses that have competitive advantages in their field and tend to be resilient bear markets. The opportunistic picks have a higher beta and are tactical positions that tend to be held for six to nine months.
These positions can act as a macro overlay to rotate the portfolio into more defensive or cyclical parts of the market, as well as a way of picking out overlooked companies. Recent examples have seen him go overweight Italy. He started increasing the position in November 2011 and the country currently makes up 12.3% of the €840 million portfolio.
French bank BNP Paribas is the top holding and a core position. Di Giansante likes its diversification across countries and the quality if its management team, He has recently been adding to Deutsche Bank as an opportunistic holding following the company’s recent strategy update. It is now the second largest position in the fund.