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The most consistent Italian equity managers revealed

The most consistent Italian equity managers revealed

Italy announced its best annual economic growth since 2011 having grown by 1.5% over the past year, beating expectations of 1.2% predicted in the first quarter.

The country has been dogged by challenges over the last five years with a banking crisis and political elections. But with a brighter outlook now in place, who is best placed to harness this up-tick in growth?

Citywire Selector has taken a look at the Italian equity sector to see which managers have provided investors with the most consistent returns over the past five years.

Currently there are 28 managers active in this sector while 25 managers have been active in the asset class for five years to the end of July 2017. The average manager out of the 25 returned 94% over the five-year period.

However, there are two managers who have consistently outperformed the average and returned far more than their peers. Let’s take a closer look at their funds. 

Luigi Degrada, Fideuram Investimenti  

Funds: Interfund Equity Italy, Fonditalia Equity Italy, Fideuram Fund Equity Italy

Five-year total return (July 2012-July 2017): 110.20%

Best year of outperformance vs. average manager: 30.80% in 2012/2013

Citywire AAA-rated Luigi Degrada currently oversees three Italian equity focused funds. The largest of which is the €876 million Fonditalia Equity Italy fund, which he has managed since April 2007.

Degrada’s best year of outperformance was in 2012-2013 when he returned 30.8% compared to the average manager return of 27.82%. The worst year of absolute performance was between 2015 and 2016 when he lost 21.35%, while the average manager lost 23.14%

In terms of holdings the largest sector allocation in his largest fund is to financials, which makes up 32.38% of exposure, which is followed by cyclical consumer goods at 16.62%.

Two energy companies make up the largest company allocations in the fund, as Degrada devotes 8.375 of the fund to Eni and Enel makes up 7.96%.

Umberto Borghesi, Albemarle AM

Fund: Atlante Target Italy Fund

Five-year total return (July 2012- July 2017): 182.83%

Best year of outperformance vs. average manager: 44.57% in 2012/2013

Citywire + rated Umberto Borghesi has run the Atlante Target Italy fund since it launched in April 2007. The CIO of Albemarle Asset Management manages seven funds at the company focusing on different equity sectors.

This specific fund focuses on Italian small and mid-caps and takes a bottom-up approach. The largest sector in the fund is industrials at 23%. Financials make up 17% of the fund and Borghesi also holds 17% of the fund in cash.

In terms of companies, the top holding in the fund is concrete producer cementer at 8.42% of the fund. This is followed by Mondadori, a publishing company which accounts for 6.76% of the fund.

In a recent update for the fund, Borghesi said he took profits on Italian bank Intesa Sanpaolo and increased holdings in fashion group Aeffe and energy company Eni. Aeffe was one of the top performing stocks in the fund in July 2017.

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