Europe's defense stocks have boomed this year , with some major players tripling in value — but one fund manager spotted the potential in sector darling Rheinmetall early, and won big as a result. Christopher Hart manages Boston Partners' $5.8 billion Global Premium Equities fund, which, net of fees, gained 22% from the beginning of this year to the end of July. His team's value investing strategy means ignoring market noise and focusing on the so-called "three circle rule" of only picking stocks that have an attractive valuation, strong business fundamentals, and positive business momentum. If at any point a stock held in the fund no longer meets all three criteria — for example, because a company's valuation appreciates too much or its fundamentals weaken — Hart said his team will sell.

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