Fidelity European Trust: Over 30% NAV and share price 3 year growth

Fidelity European Trust plc (LON:FEV) has published its fact sheet for the period to 31 December 2022.

Portfolio Manager Commentary 

Continental European equities edged lower in December after the European Central Bank (ECB) raised interest rates by 0.5% at its December meeting, bringing the deposit facility rate to 2%. The ECB said that significant rate hikes are expected at a steady pace to ensure that inflation returns to its 2% target. The central bank announced that it would begin to shrink its asset purchase programme portfolio in March by stopping the reinvestment of EUR 15 billion per month of maturing bonds. Solid US economic data led to renewed fears that the ECB may remain hawkish for longer, while a downward revision to the UK’s GDP added to the bearish sentiment. Against this backdrop, all sectors ended the month in negative territory, with IT stocks leading the laggards. From a style perspective, value stocks outperformed their growth counterparts and small-cap names outperformed their large and mid-cap counterparts.

During the month, the Trust’s NAV slightly underperformed the index. The overweight stance in technology and stock selection in financials weighed on returns, although security selection contributed to performance in the health care sector. At a stock level, private equity company Partners Group was a notable detractor amid concerns over high management fees and pressure on assets under management.

On a rolling 12-month basis, the Trust recorded NAV and share price returns of -3.6% and -3.8% respectively, compared to -7.0% for the index.

Fidelity European Trust PLC (LON:FEV) aims to be the cornerstone long-term investment of choice for those seeking European exposure across market cycles.

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