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Top 5 European Mutual Funds for 2012 (UCITS Funds)

nterested in European ? (Also referred to as UCITS funds) I am too, and for a number of good reasons. In this article I have outlined why I am currently looking into European mutual funds, at the expense of US mutual funds, and which ones I currently consider the best prospects.

Why are UCITS funds interesting?

1 – They are very popular in the world’s developing and most promising markets.

The concept of mutual funds was created in the US, but the UCITS funds (its European cousin, created in 1985), is fast becoming the way to collectively invest across the globe. These funds have recently become acceptable in the huge Asian and Latin American markets, which have huge potential for growth in the near and long-term. In Singapore, Hong Kong and Taiwan, UCTIS now has the majority share of the overall funds market.

2 – They have tax benefits over US mutual funds

UCTIS funds are beating US mutual funds primarily because they are taxed more favorably. This is because capital gains in US mutual funds are distributed to shareholders on a yearly basis. This makes it possible for the fund holders to receive a corresponding tax bill, even though the shares are still held in the fund. European mutual funds do not have to distribute their gains annually, and shareholders pay taxes are paid on gains only after they sell the shares.
3 – They offer greater investment flexibility.

European mutual funds can do more than just invest in stocks and bonds, as opposed to US mutual funds. They can also employ complex investment strategies that hedge funds in the US typically do not engage in. Full details of how they offer greater investment flexibility are beyond the scope of this article, but well worth looking into further.

As a result of these advantages, European mutual funds are winning the global contest to become the world’s most popular mutual funds.

Now, what are the top five European mutual funds for 2012? Each of these funds has a Zacks #1 Rank (Strong Buy), and they are expected to perform well this year.

Henderson European Focus A (HFEAX). This fund has a three year annualized return of 14.59 percent.

Columbia European Equity A (AXEAX). Over the past three years this fund made 12.09 percent.

Eastern European Equity A (VEEEX). This fund has a three year annualized return of 8.10 percent.

Royce European Smaller Companies Service (RISCX). In the previous three years this fund made 17.96 percent.

Mutual European A (TEMIX). This fund had a three year annualized return of 7.20%.

I strongly suggest you research further into all five of these funds. I myself have investments in all five of them!

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The information supplied in this article is not to be considered as medical advice and is for educational purposes only.