By Rob Burnett, Neptune’s Head of European Equities
The Neptune European Opportunities Fund remains committed to a value bias. We see a broadening array of opportunities in diversified industries at compelling valuations today.
The most complicated part of the market is the European banks. We are currently overweight in this sub-sector as many banks are at record low price-to-earnings (P/E) and price-to-book (P/B) ratios and are paying record-high cash dividends. Two of our largest holdings, BNP Paribas and Societe Generale are paying over 6 per cent in cash dividends in 2016, reflecting a payout ratio of just 50 per cent of earnings. As a result, banks are the highest yielding sector in the market by a large margin.
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