Five-Star Fund Manager Names 'Above Average' Firms
European markets have "huge opportunities," says Jason Holzer. He's the senior portfolio manager of Vanguard's AIM European Small Company A fund . Rated five stars by Morningstar, AIM has had annualized returns of some 38% over the last five years. Holzer joined "Squawk on the Street" to talk about the "very strong" European economies -- and how his fund plays them.
Holzer said he favors Continental companies with "above average growth" -- but conservative balance sheets. The portfolio manager seeks untapped value in firms that "are sometimes sleepy in the way they are run" -- allowing aggressive managers to find unseen synergies.
The portfolio manager said AIM is "broadly" exposed to "faster growing countries" such as Greece, Ireland and the Scandinavian nations. None of the companies are publicly traded in the U.S., he pointed out.
Some names held by AIM European Small Company A:
- USG (Netherlands). One of Europe's largest temporary employment companies. Two-thirds of its exposure is to the Benelux nexus -- Belgium, Netherlands, Luxembourg -- and Germany, regions enjoying "solid double-digit growth." USG also has a "healthy exposure to France," Holzer says.
- Inspired Gaming (U.K.). He underscores that this provider of gaming machines has "no exposure to illegal online gaming." The portfolio manager notes that the industry is shifting to server-based games, which have more endurance -- and are "a win all around, very profitable." He sees a big international growth potential, as Inspired is teaming up with gaming companies across Europe and Asia.
- Fuchs Petrolub (Germany). Holzer says this is one of the fund's largest holdings. He describes Fuchs as one of the world's top independent suppliers of specialty lubricants -- in an industry mostly owned by oil companies. The firm is family-controlled, with "strong insider buying" and a "strong stock buyback program." He says Fuchs has plenty of leverage opportunity.