Fidelity European Trust PLC (LON:FEV) monthly factsheet for the period ended July 2023.
Portfolio Manager Commentary
Continental European equities continued to advance in July on cooling inflation in the eurozone and the US, and the announcement of additional stimulus measures in China. Both the European Central Bank (ECB) and the US Federal Reserve raised interest rates by 0.25 percentage points, as widely expected by
markets. ECB’s overall tone moved in a dovish direction, with the bank expecting inflation to drop further over the remainder of the year. The eurozone economy grew modestly during the second quarter with preliminary estimates showing that GDP expanded by 0.3%, contributing to the perception of a soft-landing scenario.
During the month, the Trust recorded positive returns but underperformed the index. Security selection in industrials, health care and technology detracted from relative returns. However, strong performance of financials stocks drove gains. At a stock level, MTU Aero Engines was negatively impacted by the recall of
GTF engines due to metal contamination issues. Positively, MTU reported in line Q2 results. Among the key contributors, private equity company Partners Group rallied after reiterating AUM guidance for the full year.
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 23.5% respectively, compared to 16.1% 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.