Fidelity European Trust PLC (LON:FEV) monthly factsheet for April 2024.
Portfolio Manager Commentary
Continental European equities edged lower in April but outperformed the US. Markets responded negatively to speculation that central banks will not move to ease their monetary policies as quickly as previously hoped, given resilient growth and sticky inflation data. Commodity prices were boosted by the strong economic picture and an escalation in tensions in the Middle East. While the European Central Bank maintained interest rates at record-high levels during its April meeting, officials indicated that a looser monetary policy would be appropriate if inflation continues to converge towards the central bank’s 2% target.
During the month the Trust underperformed the index. Positioning in technology was the main drag to relative returns, with gearing exacerbating the relative return. In financials, private equity firms, Partners Group and EQT Partners were weak. Partners Group continued to fall after reporting lacklustre H2 2023 results in March. EQT reported a rise in assets under management in the first quarter, however the investments by its funds and fund exits were lower than the previous year. Oil & gas major Total Energies rose in line with the energy sector, buoyed by higher oil prices over the month. 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 9.9% and 12.3% respectively, compared to 9.4% 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.
