Turning the mistakes of others into profit

Managers of Liontrust's Continental Europe fund look to exploit company's flawed forecasts in tandem with a cashflow focus to uncover hidden value

Liontrust launched Continental Europe for Gary West and James Inglis-Jones in November 2006. Benchmarked against the FTSE All World Developed Euro ex UK, the fund has 37 equally-weighted holdings, with its biggest country exposure to Switzerland, Sweden and Norway. At sector level, the most significant exposure is to financials and industrials, both of which constitute just over half of the portfolio. The two managers, who joined in March 2006, invest in companies with strong cashflows likely to beat investors' low profit expectations. They use their so-called Cashflow Solution process to...