Fidelity European Trust PLC (LON:FEV) monthly factsheet for May 2026.
Portfolio Manager Commentary
European equities continued their recovery in May, although returns in Europe lagged other major global markets. Investor sentiment was influenced by developments in the Middle East, with periods of optimism around a potential ceasefire between the US and Iran supporting markets, while renewed military action later in the month led to volatility.
The Trust outperformed its benchmark against this backdrop, driven by positive market allocation in the technology and utilities sectors, although gearing was a headwind. Technology holdings, including ASML and NXP Semiconductors, benefited from continued AI-related optimism and resilient semiconductor earnings, while the absence of Infineon Technologies weighed on relative performance. Ryanair also contributed positively following strong full-year results and robust passenger growth. Conversely, 3i Group detracted as weaker-than-expected trading at Action raised concerns over near-term earnings growth. Energy holdings, including Siemens Energy and TotalEnergies, also weighed on performance amid weaker energy prices and softer refining margins.
Our focus remains on finding attractively valued companies with strong 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 8.9% and 6.5% respectively, compared to FTSE World Europe ex UK Total Return Index that returned 20.9%.
Fidelity European Trust PLC (LON:FEV) aims to be the cornerstone long-term investment of choice for those seeking European exposure across market cycles.
