Morningstar

BGF European Special Situations A4 EUR

Analyst Report
Morningstar's Take
|08/07/2024
by Ronald van Genderen
BlackRock announced that Tom Joy has been appointed co-portfolio manager alongside Stefan Gries on BGF European Special Situations, effective April 16, 2025.

Joy joined BlackRock early in his career and gradually took on more responsibility, first as an analyst and then as a co-portfolio manager on BGF Euro-Markets, working closely with Andreas Zoellinger. He became the sole lead manager of this strategy in early 2025, following Zoellinger's retirement. In November 2024, Joy became comanager of BGF European Equity Transition alongside Peter Hopkins, but he’s relinquishing this responsibility following his appointment to BGF European Special Situations.

We view Joy's appointment alongside the highly regarded Gries as a strengthening of this Strategy's leadership. However, BlackRock also announced the unexpected departure of Stephanie Bothwell from the team, which comes on the heels of team changes earlier in 2025, including the loss of some research analysts. Despite the organizational shifts, we reiterate the strategy's People Pillar rating of High and the Process Pillar rating of Above Average, but we will conduct a full assessment of the impact of recent events in due course.

 
The combination of a capable and very knowledgeable lead manager and a high-quality team that supports him in stock selection earns this strategy a People Pillar upgrade to High from Above Average. This team has the capabilities to successfully execute this flexible and unconstrained approach, which earns an Above Average Process rating.

This strategy is managed by Stefan Gries, a capable and very knowledgeable portfolio manager. He resides in and is supported by BlackRock’s 20-plus fundamental European equity team. This team has gone through a turbulent period from 2017 through 2019, but it has been put back on track, and we consider it now to be one of the best-resourced and highest-quality teams in the space. The increased cohesiveness and diverse talents of its members represent a solid foundation for all the strategies run by the group, which often share the same investment ideas.

This high-quality team is key as Gries fully relies on its comprehensive and rigorous research in his stock selection. The team’s deep fundamental research, which gained additional data-based insights in 2018, is centered around a structured framework using three lenses: wealth creation, resilience, and change. Ideas are extensively debated within the team, exemplifying the collaborative culture. The team’s stock research drives Gries’ search for companies that score well on quality of management, investment in growth, return on capital, and unique aspects. The approach is flexible in style, but we expect its investment criteria to result in a structural growth orientation in stock selection, although there is room for more opportunistic value plays as well.

The portfolio typically lands in the growth columns of the Morningstar Style Box driven by for example longer-term top-10 holdings Novo Nordisk, ASML, and LVMH. Gries can invest across the market-cap range but typically focuses on large caps, with small caps playing a minor role, aligning the portfolio size exposure with the Europe large-cap growth equity Morningstar Category average and Morningstar Developed Markets Europe Growth Target Market Exposure Index category benchmark. The approach is implemented with conviction, as reflected by the portfolio’s high top-10 concentration and Gries’s willingness to make bold moves, translating into dynamic sector allocations. For example, he has built out his positioning in the financial services sector since 2022, mostly by adding to his positioning in banks, and the sector has been significantly overweighted versus the category average and benchmark ever since.

Gries’ record is still limited, but he has a longer remit on BGF European, which uses the same approach. Here he is building a convincing track record since he took charge of it in June 2019 and has significantly distanced the category average and benchmark over his tenure. Risk levels have been elevated, but his risk-adjusted performance has been outstanding and largely achieved by strong stock-selection results.
 
Morningstar Medalist Rating™A capable manager backed by a high-quality team earns our highest grade.
To find out how Morningstar rates a fund click here.
Morningstar Pillars
PeopleHigh
ParentAbove Average
ProcessAbove Average
 
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
Morningstar reserve its rights to charge for access to these Ratings and/or Rating report.
Permissions/Reprints   E-mail Morningstar     
In order to provide consistency across the report data provided by different Asset Managers, the calculated data points presented are generated using Morningstar’s proprietary calculation methodology which is set out in more detail at(https://www.morningstar.com/research/signature)
© Copyright 2025 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookie Settings        Disclosures

The Morningstar Star Rating for Stocks is assigned based on an analyst's estimate of a stocks fair value. It is projection/opinion and not a statement of fact. Morningstar assigns star ratings based on an analyst’s estimate of a stock's fair value. Four components drive the Star Rating: (1) our assessment of the firm’s economic moat, (2) our estimate of the stock’s fair value, (3) our uncertainty around that fair value estimate and (4) the current market price. This process culminates in a single-point star rating that is updated daily. A 5-star represents a belief that the stock is a good value at its current price; a 1-star stock isn't. If our base-case assumptions are true the market price will converge on our fair value estimate over time, generally within three years. Investments in securities are subject to market and other risks. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detail information about the Morningstar Star Rating for Stocks, please visit here

Quantitative Fair Value Estimate represents Morningstar’s estimate of the per share dollar amount that a company’s equity is worth today. The Quantitative Fair Value Estimate is based on a statistical model derived from the Fair Value Estimate Morningstar’s equity analysts assign to companies which includes a financial forecast of the company. The Quantitative Fair Value Estimate is calculated daily. It is a projection/opinion and not a statement of fact. Investments in securities are subject to market and other risks. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detail information about the Quantiative Fair Value Estimate, please visit here

The Morningstar Medalist Rating is the summary expression of Morningstar’s forward-looking analysis of investment strategies as offered via specific vehicles using a rating scale of Gold, Silver, Bronze, Neutral, and Negative. The Medalist Ratings indicate which investments Morningstar believes are likely to outperform a relevant index or peer group average on a risk-adjusted basis over time. Investment products are evaluated on three key pillars (People, Parent, and Process) which, when coupled with a fee assessment, forms the basis for Morningstar’s conviction in those products’ investment merits and determines the Medalist Rating they’re assigned. Pillar ratings take the form of Low, Below Average, Average, Above Average, and High. Pillars may be evaluated via an analyst’s qualitative assessment (either directly to a vehicle the analyst covers or indirectly when the pillar ratings of a covered vehicle are mapped to a related uncovered vehicle) or using algorithmic techniques. Vehicles are sorted by their expected performance into rating groups defined by their Morningstar Category and their active or passive status. When analysts directly cover a vehicle, they assign the three pillar ratings based on their qualitative assessment, subject to the oversight of the Analyst Rating Committee, and monitor and reevaluate them at least every 14 months. When the vehicles are covered either indirectly by analysts or by algorithm, the ratings are assigned monthly. For more detailed information about these ratings, including their methodology, please go to here

The Morningstar Medalist Ratings are not statements of fact, nor are they credit or risk ratings. The Morningstar Medalist Rating (i) should not be used as the sole basis in evaluating an investment product, (ii) involves unknown risks and uncertainties which may cause expectations not to occur or to differ significantly from what was expected, (iii) are not guaranteed to be based on complete or accurate assumptions or models when determined algorithmically, (iv) involve the risk that the return target will not be met due to such things as unforeseen changes in changes in management, technology, economic development, interest rate development, operating and/or material costs, competitive pressure, supervisory law, exchange rate, tax rates, exchange rate changes, and/or changes in political and social conditions, and (v) should not be considered an offer or solicitation to buy or sell the investment product. A change in the fundamental factors underlying the Morningstar Medalist Rating can mean that the rating is subsequently no longer accurate.

For information on the historical Morningstar Medalist Rating for any managed investment Morningstar covers, please contact your local Morningstar office.

For more detailed information about conflicts of interest, including EU MAR disclosures, please see the “Morningstar Medalist Rating Analyst Conflict of Interest & Other Disclosures for EMEA”here

Select Your Site Edition To make sure the site is relevant to you, we need to know if you’re an individual investor or a financial professional.