Fidelity European Trust PLC (LON:FEV) monthly factsheet for April 2025.
Portfolio Manager Commentary
Continental European equities declined in April, reflecting ongoing volatility across global markets, while the introduction of tariff uncertainty has reduced confidence in future growth.
The Trust underperformed the index during the month, primarily due to weak stock picking in the energy, industrials, and health care sectors, while impact of gearing had a small positive impact. TotalEnergies traded lower in line with the broader energy sector, which was pressured by falling commodity prices and concerns over slowing global growth amid rising trade tensions. Despite in-line Q1 results across all divisions, weaker-than expected cash flow due to a sharp rise in working capital, hybrid repayments, and FX effects disappointed investors. An additional drag came from the Trust’s exposure to private equity business Partners Group. In contrast, 3i Group was a top contributor, driven by its stake in discount retailer Action. Action sells cheap products from China and SouthEast Asia into Europe and is therefore positioned as a tariff beneficiary. Shares in L’Oréal rose after the company reported an increase in Q1 sales.
Our focus is on finding attractively valued companies with good prospects for cash generation and dividend growth over the longer term. On a rolling 12-month basis, the Trust recorded NAV and share price returns of 1.5% and 2.2% respectively, compared to FTSE World Europe (ex UK) Index that returned 7.2%.
Fidelity European Trust PLC (LON:FEV) aims to be the cornerstone long-term investment of choice for those seeking European exposure across market cycles.
