European investment trusts November equities rally as inflation falls to 2.4% (LON:FEV)

Fidelity European Trust PLC (LON:FEV) monthly factsheet for the period ended 30 October 2023.

Portfolio Manager Commentary

After falling for three consecutive months, Continental European equities rallied in November as cooling inflation boosted hopes that central banks will adopt a more dovish tone. Eurozone inflation eased to 2.4% in November, from October’s reading of 2.9%. Lower energy prices were the major contributor to the fall; and both goods and services inflation also eased, putting the 2% target in sight as investors speculate that the European Central Bank (ECB) will cut interest rates sooner than previously suggested. ECB President Christine Lagarde signalled that the bank will continue to focus on bringing inflation back to its long-term target of 2% and will not act upon short-term developments.

During the month, the Trust outperformed the index, driven by strong stock picking in financials and the large overweight in technology. The Trust’s use of gearing supported relative returns in a strongly rising market. Gains were somewhat limited by weaker stock picking in industrials and consumer discretionary. At a stock level, financials holdings Partners Group, 3i Group and EQT, were the top contributors to relative gains. Conversely, the short position in an industrial business detracted from performance.

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 10.7% and 9.0% respectively, compared to 10.3% for the index.

Click to view all articles for the EPIC:
Or click to view the full company profile:
Facebook
X
LinkedIn
Fidelity International

More articles like this

Fidelity European Trust

European markets rally on softer tariff hopes

Markets sprang back to life on Monday as a wave of cautious optimism swept across Europe. Investors responded positively to signs that upcoming US tariffs may be more focused and less aggressive than feared, reigniting confidence

Fidelity European Trust

European defence stocks surge

European defence stocks surge as UK and France push for peace in Ukraine. BAE Systems and other firms see gains amid heightened military spending expectations.