The TR European Growth Trust invests in small European companies that show high growth potential, and aims to increase the value of shareholders’ investments.

What does it do?

The Trust’s main objective is to increase the value of shareholders’ money by investing in small companies in Europe, excluding the UK, that have the potential to become big companies in the future.

How does it do it?

The Trust invests predominantly in companies in Western Europe with an average value of just over £1bn in size, which show high growth potential. The Trust can also invest in larger, well-known companies if they show similar growth potential.

Why does Ollie do it?

Janus Henderson provides a good platform for me to run this Trust. There are smart people around me and I listen to their views. We have a large team focussed on Europe with good experience of investing in smaller companies.

Assistant fund manager Rory Stokes and I regularly communicate with small European companies to get to know their management teams, financial health and evaluate whether or not we should be invested in them. Between us, we attend more than 600 meetings with companies each year.

The income from dividend payments is certainly a factor that we look at when making an investment decision, but it is not an income fund as such, and is therefore not a major consideration. Each company we invest in must make sense individually, but we also consider global macroeconomic trends when investing, such as currency fluctuations and political risk.

What are the Risks?

Share prices go up and down. If you sell your shares at a lower price than you bought them, you will have lost money. You should be comfortable with this risk before investing. See Step 2 for more information on risk, if you haven’t already.

Active management techniques that have worked well in normal market conditions could prove ineffective or detrimental at other times.

This Trust is suitable to be used as one component in several in a diversified investment portfolio. Investors should consider carefully the proportion of their portfolio invested into this Trust.

Derivatives use exposes the Trust to risks different from, and potentially greater than, the risks associated with investing directly in securities and may therefore result in additional loss, which could be significantly greater than the cost of the derivative.

The return on your investment is directly related to the prevailing market price of the trust’s shares, which will trade at a varying discount (or premium) relative to the value of the underlying assets of the Trust. As a result losses (or gains) may be higher or lower than those of the Trust’s assets.

Where the trust invests in assets which are denominated in currencies other than the base currency then currency exchange rate movements may cause the value of investments to fall as well as rise.

The Trust may borrow money (gearing) as part of its investment strategy. If the Trust utilises its ability to gear, the profits and losses incurred by the trust can be greater than those of a trust that does not use gearing.

If the Trust seeks to reduce risks (such as exchange rate movements), the measures designed to do so may be ineffective, unavailable or detrimental.

Most of the investments in this portfolio are in smaller companies shares. They may be more difficult to buy and sell and their share price may fluctuate more than that of larger companies.

Source: Morningstar