We seek to generate income and some capital growth over the long term (five years or more), principally by investing in transferable securities of European issuers. We aim to ensure that at least 75% of the fund’s assets are invested at all times in equities issued by companies based in a Member State of the EU, in Norway, Iceland, Turkey, Switzerland or the UK.

The remainder will be invested in government securities, fixed income, closed-ended collective investment schemes/vehicles (which may include those managed and/or operated by the authorised corporate director (ACD) and will provide exposure to various asset classes including equities and bonds), real estate investment trusts, money market instruments, deposits, cash and near cash.

We adopt an unconstrained approach to investing in Europe, which could offer a reliable and diversified source of income to our investors:

- We apply our strict investment criteria across all parts of the European equity market, including under-researched smaller companies
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- We have a clear understanding of the inefficiencies we are looking to exploit and use our in-depth research capabilities to understand companies not well known to other investors
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- Our disciplined approach allows us to go against the herd to search for the most attractive income opportunities

We aim to provide a diversified source of equity income, through a disciplined and patient approach to identifying and investing in a relatively concentrated, conviction portfolio of high-quality businesses, trading on attractive valuations.

We follow a bottom-up, fundamental research-driven process, with investment ideas coming from two main sources:

‍Contrarian ideas – We are long-term investors (typically holding positions for three to five years). Coupled with our in-depth investment research, this allows us to take advantage of negative sentiment to establish positions in high-quality companies when they are out of favour with the broader market. We have confidence in our approach to hold the position and have patience for our investment thesis to play out.  

‍Under the radar ideas – Following an unconstrained approach - and not being bound by market capitalisation, industry or sector - allows us to focus on lesser-known and under-researched companies from across the length and breadth of the European market. The structural changes to the market, such as, MiFID II, shift to passive investing, rise of environmental, social and governance (ESG) and increased focus on liquidity, means these mid and small-cap companies can be an increasingly attractive source of often uncorrelated alpha.

We seek to give clients an attractive total return, which is made up of three parts:

- A healthy dividend yield – at least the market yield
- Dividend growth – above the rate of inflation
- Capital growth

Our investment funds are not suitable investments for everyone, so we recommend seeking financial advice. This fund may not be appropriate if you plan to withdraw your money within five years. As with all investments, there are risks you should be aware of and comfortable with before you invest.

The value of your portfolio can go down as well as up so your capital is at risk and there is no guarantee you will get your investment back.

Any income received from your investment in the VT Downing European Unconstrained Income Fund can rise and fall.

This European income fund adopts a high conviction approach, investing in typically 30-40 companies, which can carry more short-term volatility than a fund investing across a larger number of companies.

The fund has no benchmark: the portfolio is constructed independently of a benchmark index and does not have any particular industry or economic sector focus. As such, weightings may vary as required and investments may be in the same sectors.

The past performance of a fund is not a reliable indicator of future results.

The fund can conclude various transactions with contractual partners. If a contractual partner becomes insolvent, it can no longer or can only partly settle unpaid debts owed to the fund.

External factors can cause an entire asset class to decline in value, which would result in a decrease in the value of investments.

The fund may invest in overseas securities, so movements in exchange rates may, when not hedged, cause the value of your investment to increase or decrease.

Adverse market conditions may affect the ability to sell certain assets when necessary. Reduced liquidity may have a negative impact on the price of assets.

Please note this is only a brief overview of the risks involved with investing in the VT Downing European Unconstrained Income Fund. Please read the full details of all the risks here before investing.

The charges you pay go towards the costs of running the VT Downing European Unconstrained Income Fund. These charges reduce the potential growth of your investment.

‍Entry charge: no initial charge

‍Ongoing charges*:
Class A - 0.99%
Class F - 0.79%

*Please note: This percentage is based on the net asset value of the sub-fund attributable to the relevant share class (plus VAT if applicable) as at 16 February 2024. This figure may vary from year to year. It excludes portfolio transaction costs. There may be further charges for buying and selling assets for the fund and 'dilution levy' costs associated with entering or exiting the fund. This is to cover costs associated with your transaction.

Please see the prospectus for more information.