The Columbia European Equity Fund Class A (AXEAX) seeks capital appreciation by investing in “equity securities of European companies that are believed to offer growth potential.” The fund’s management has stated that “under normal market conditions, the Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in equity securities of European companies.”
The fund management retains the option of investing in securities of companies situated in developing or emerging markets. However, the bulk of the portfolio is invested in securities of companies located in developed economies.
AXEAX is diversified, with 67 holdings as of September 2015, when it was managing assets worth $539.62 million. As of the fund’s September portfolio, its top ten equity holdings included Novartis AG (NVS), Roche Holding (RHHBY), Bayer AG (BAYZF), and BT Group (BT), which together make up 12.2% of the fund’s portfolio.
For this analysis, we’ll be considering AXEAX’s holdings as of August 2015, which is the latest sectoral breakdown available to us. The fund’s holdings after August reflect valuation-driven changes to the portfolio, not the actual holdings. In the graph above, the sectoral composition for September 2015 has been taken from the fund house’s website.
There have been three noticeable changes in the portfolio since 2014, as far as the sectoral composition is concerned.
- AXEAX’s managers have considerably reduced their exposure to the consumer staples sector, from 12% as of December 2014 to 7% as of September 2015.
- The fund’s managers have taken a similar approach to the energy sector. Stocks from this sector used to form over 6% of the fund’s portfolio a year ago, but the energy sector represented less than 1.5% of the fund’s holdings as of September 2015.
- On the other hand, AXEAX’s exposure to financials increased from 19.5% in December 2014 to 24.5% as of the fund’s latest portfolio disclosure.
But how have these sectoral moves impacted the performance of the Columbia European Equity Fund Class A (AXEAX)? Continue to the next part of this series to find out.