The Fidelity International European Fund took top place this quarter as it posted the highest returns of Europe’s 10 biggest stock mutual funds, according to Bloomberg.

The $8.5 billion fund, run by Tim McCarron, advanced 4.1 %.

The average European stock fund rose 2%, trailing the 2.7 % advance of domestic-based equity funds.

“The quarter has been difficult for many managers, and McCarron has ridden the volatility better then most,” said Justin Modray, a financial adviser at Best Invest in London. “He is among our most highly rated fund managers.”

The fund has performed well do to the $455 billion of announced mergers and acquisitions in the region. Madrid-based Altadis SA, the maker of Gauloises cigarettes, received a $15.4 billion takeover bid from Imperial Tobacco Group last month. Altadis’ shares have advanced 21% so far this year. 

Akzo Nobel NV stock, which rose 23 % this year, was one of the fund’s best picks.

However, UBS AG, the fund’s biggest holding, hurt the fund’s performance on concern regarding defaults in the U.S. mortgage market, McCarron said. Shares of UBS fell 2.5 % in the quarter.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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