Franklin Templeton has more than halved the size of the Franklin European Opportunities fund since Mike Clements has taken over the management of the portfolio, according to a Investment Week report.
Since Clements has assumed control of the fund, he has reduced the number of holdings from around 75 to around 30, in line with the concentrated approach he has used on the group’s European Growth SICAV.
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The fund has a multi-cap approach, with the median stock size being mid cap.
Clements said: "We are looking for niche businesses in niche markets: businesses that are doing one thing very well. As an example he points to include the UK’s Cineworld chain and credit insurer Euler Hermes.
Clements also added that he is uneasy over sectors such as telecoms and utilities, because of their leveraged balance sheets. He also owns just one pharmaceutical, Roche, and said its qualities mark it out as very different from rivals in the sector.
"The problem with pharmaceutical companies is uncertainty over their pipelines," Clements added.
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By GlobalDataOn financials, Clements said it is highly unlikely he will ever own a bank in the portfolio, despite the recent rally in the sector, due to their complicated balance sheets.
"You just do not get enough disclosure to understand the balance sheet with banks. It is even worse for the investment banks," Clements said.
