Fidelity European Trust PLC (LON:FEV) monthly factsheet for January 2025.
Portfolio Manager Commentary
Continental European equities advanced in January, supported by tentative signs of an improvement in eurozone macroeconomic data and a strong start to the corporate earnings season. European markets also benefitted from relatively modest exposure to the information technology sector, in a month that saw volatility for global technology stocks in the wake of Chinese artificial intelligence (AI) startup DeepSeek’s claims on the development of efficient low-cost AI models.
The Trust outperformed the index during the month, primarily due to the impact of gearing in the strongly rising market but positioning in the technology and healthcare sectors also aided performance. Luxury giants Hermès and LVMH, and luxury eyewear business EssilorLuxottica (in the healthcare sector) were all among the top five stock contributors. However, within the consumer discretionary sector underweight exposure to Richemont and an overweight to Puma detracted from performance. Richemont reported stronger-than-expected quarterly sales and provided robust guidance, while shares in Puma declined after the company reported Q4 sales below expectations and a decline in annual profits.
Our focus is on finding attractively valued companies with good prospects for cash generation and dividend growth over the longer term. In January 2025, the Trust recorded NAV and share price returns of 8.7% and 9.6% respectively, compared to FTSE World Europe (ex UK) Index that returned 11.1%.
Fidelity European Trust PLC (LON:FEV) aims to be the cornerstone long-term investment of choice for those seeking European exposure across market cycles.
