TR European Growth Trust (TRG) suffered in the recent equity market sell-off for a number of reasons, including its relatively high level of gearing, procyclical bias and structural focus on the smaller end of the European small-cap market. However, by taking advantage of the chance to buy good companies at low valuations, and disposing of holdings whose balance sheets looked vulnerable, manager Ollie Beckett has so far outperformed the EMIX Smaller Europe ex-UK Index since the mid-March lows. The manager argues that while the COVID-19 pandemic may have wide-ranging effects, and an EU-wide approach to rebuilding economies is key to the union’s long-term survival, there are many opportunities for small-cap investors to benefit from the recovery, whatever shape it takes.
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