Fidelity European Trust PLC (LON:FEV) monthly factsheet for the period ended 31 January 2024.
Portfolio Manager Commentary
Continental European equities rose for a third consecutive month as investors drew comfort from upbeat corporate results and anticipated interest rate cuts by major central banks. As expected, the European Central Bank maintained its key interest rate at 4.0% and indicated that it is likely to implement its first rate cut in the Summer, whilst emphasizing the need for more evidence of disinflation to justify a more accommodative policy.
During the month, the Trust outperformed the index. Security selection in the information technology and health care sectors, coupled with strong performance of technology holdings drove gains. At a stock level, Dutch semiconductor business ASML rose on the back of strong Q4’23 results and a growing order backlog. SAP advanced on upbeat results for Q4 and FY2023, and encouraging guidance for FY2024 driven by acceleration in its key cloud business. Conversely, weaker performance of financials and consumer discretionary stocks held back gains. German sportswear business Puma was the biggest relative detractor. Shares fell after the company’s FY2023 net profit modestly disappointed and guidance for FY2024 growth came in below consensus.
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 11.2% and 9.8% respectively, compared to 8.8% for the index.
Fidelity European Trust PLC (LON:FEV) is a European investment trust. It aims to be the cornerstone long-term investment of choice for those seeking European exposure across market cycles.
