Messrs Ferstl and Ploder, who co-manage the firm’s UCITS III-compliant European Total Return and European Opportunities funds, believe markets are only nine years in to a typical 13-16 year bear market cycle and have been positioning the portfolio defensively.

However, in recent weeks the managers have increased the funds’ positions in the once-unloved telecoms sector, finding earnings to be much more stable than widely assumed. In particular, they identify mobile internet as an untapped development, and the natural step forward in telecom evolution.

Mr Ferstl said: “Telecom companies are producing much healthier balance sheets than they have done in previous years, and it is encouraging to see companies are no longer over-investing or over-spending. It is evident that many have learnt the lessons from the tech boom and bust of 2000 and are keeping finances in check.

“Subsequently, a good handful of companies are producing high dividend yields and earnings are looking stable. Some are also benefitting from mobile internet, which was not here five years ago, and which we predict will explode into the consumer space in the next couple of years. The introduction of flat-rates over per-minute rates is also helping telecom companies.”

Mr Ploder added: “The sector is very much under-rated. Companies we have increased our exposure to in recent weeks are Deutsche Telekom who we believe will bring good returns following the potential sale of T-Mobile, its UK mobile operations, and France Telecom which is doing well in home and international markets with its Orange brand.”

The FCM European Opportunities fund targets returns similar to equity markets but with significantly lower volatility. The fund combines stock picking with tactical asset allocation and focuses on capital preservation. The fund is up 6 per cent for the year, according to Lipper, the research firm. Over the nearly six-year period since the strategy’s launch, the fund is up by 53 per cent.

The FCM European Total Return fund is managed in the same way, but has a target return of EURIBOR + 300 basis points per annum over a full market cycle.  The fund is up 2.7 per cent for the year, according to Lipper. Over the six and a half  years since the strategy’s launch, the fund is up over 43 per cent.