European Assets Trust - Keeping the faith in a volatile world

European smaller companies’ funds focused on growth investing have had a torrid 2022 as soaring inflation, rising interest rates, cost of living pressures and slowing economic growth have prompted increasing investor risk aversion, resulting in a dramatic sell-off for long-duration growth assets. EAT has not been immune to such pressures despite its focus on growing, high-quality, well-capitalised and modestly indebted companies. In our last update, Well placed to deliver further capital growth, we made the case for the EAT’s place in this niche area of investment. Performance of the asset class has since deteriorated further, with the possible headwinds for European smaller companies strengthening. However, investors can take comfort in the investment process established by experienced fund managers Sam Cosh and Lucy Morris, which they have used here since 2011 to good effect.