Fidelity European Trust PLC (LON:FEV) monthly factsheet for September 2024.
Portfolio Manager Commentary
Continental European equities saw a slight decline in September. The month started on a disappointing note on the back of weak manufacturing data from the US and Europe, fuelling concerns about economic growth. Markets were further weighed down by worries about a slowing US labour market. This was partially overshadowed by the positive effects of monetary easing from both the European Central Bank and the Federal Reserve.
During the month, the Trust underperformed the index. Security selection in the health care and consumer staples sectors were the main drivers of underperformance, while gearing added some value. The Trust’s holding in Novo Nordisk was the top detractor. Shares were weak after competitor Roche (held in the portfolio and was among the top 10 contributors) unveiled promising early-stage results for a competing oral weight-loss drug. The Trust’s exposure to ASML was another source of weakness. Shares fell in line with the weakness in the semiconductor sector. These losses were offset by the Trust’s exposure to KONE and 3i Group. Kone rose as investors reacted positively to news of the Chinese stimulus package. The 3i Group shares rose after a positive capital markets day update.
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 17.4% and 17.3% respectively, compared to 15.3% for the index.
