How defensively are European funds positioned?

How defensively are European funds positioned?

In times of economic uncertainty, the question of whether to invest in cyclical or defensive stocks often comes up. Using exclusive data from Morningstar, Investment Week analyses the most and least defensive funds in the universe.

As is the norm, managers tend to invest in defensive stocks when economies are on a downward path or recession, rather than cyclical stocks which tend to drop in price during such periods, and perform better when the economy is in good shape. An analysis of data from Morningstar reveals that, in aggregate, just over a quarter of a European fund's portfolios - around 26% - is currently held in defensive stocks. Henderson European Focus, for example, has a 51% exposure to defensive stocks, with just 1.2% in cyclical stocks. The Old Mutual Threadneedle European Equity fund and the Aviva ...