Fidelity European Trust outperforms as financial, health care and cosmetic stocks rise

Fidelity European Trust PLC (LON:FEV) monthly factsheet for the period ended 31 March 2023.

Portfolio Manager Commentary

Continental European equities delivered a small positive return over March, despite significant volatility due to the collapse of Silicon Valley and Signature Banks in the US and subsequent failure of Credit Suisse in Europe, which led to fears of wider contagion in the banking sector. Despite the market volatility, the European Central Bank (ECB) raised rates by 0.5% as expected in March. The central bank reassured markets that it is “fully equipped” to provide additional support to the banking system to preserve financial stability. ECB President Christine Lagarde continued to signal that further rate hikes would be based on data releases and observed that “inflation is projected to remain too high for too long”. That
said, headline inflation in the eurozone fell to 6.9% in March from 8.5% in February.

During the month, the Trust recorded positive returns and outperformed the index. The outperformance was driven by the overweight in consumer discretionary and technology, and strong stock picking in financials. At a stock level, cosmetics major L’Oreal was the biggest contributor as shares advanced on broker upgrades. Health care companies Novo Nordisk and Sanofi were also among the strong performers.

On a rolling 12-month basis, the Trust recorded NAV and share price returns of 12.6% and 14.1% respectively, compared to 8.7% 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.

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