Fund Profile

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Disclosure – Non-substantive Research

This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour. 

Overview
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Overview

Fidelity European Values (FEV), run by Sam Morse, aims to offer long-term capital growth through a portfolio of European equities.

Portfolio: The trust is managed cautiously, with Sam seeking growth opportunities at a reasonable price. A key element of his strategy consists of picking companies based on their prospects for producing dividends and dividend growth, as he believes this indicates steady structural growth. The portfolio is relatively concentrated, typically with 40 to 50 holdings and the top ten holdings making up around 40% of the portfolio.

Manager: Sam has more than 25 years’ experience as an investor and has produced strong results at the helm of the trust since his appointment at the start of 2011.

Performance: The manager has managed to carry his strong record into 2019, and despite the cautious approach, has managed to outperform during the rebound.

Discount: The discount currently sits at 8.7%, having narrowed slightly since we last covered the trust in December.

Kepler View

Having been at the helm of the portfolio for over eight years, Sam has been able to prove himself as one of the better managers in the European sector, in our view. NAV total returns are ahead of the AIC Europe sector average over one, three and five years and FEV has clearly outperformed its benchmark over one, three, five and ten years (ending 15 October 2019). Alongside this, the manager continues to deliver strong dividend growth, although the yield is unlikely to appeal to income seekers (1.1%).

Due to the manager’s more cautious approach, his strategy is likely to become more favourable as we see continued volatility in 2019/20. We have seen an increasing number of people become increasingly nervous about holding highly valued growth stocks, and Sam’s approach of considering valuations is becoming increasingly favourable. We believe that this, along with some of the political uncertainty subsiding, could mean the discount will narrow in coming months.

bull Bear
The fund is run by a manager with a strong track record for outperforming the benchmark and peer group Europe continues to be out of favour at the moment, and the outlook is far from settled
Decent dividend growth Discount volatility in the past has been extreme, and a bumpy ride for Europe could see that pattern repeated
Active discount control mechanism
Continue to Portfolio
2022 Kepler Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for growth... Find out more

Fund History

18 May 2022 Riding out the storm
We look at trusts with tightly governed discounts which may appeal to investors in volatile markets…
09 Sep 2021 What next for European equities?
After a strong period for European equity markets, we ask whether this trend can continue…
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
07 Jan 2021 Fund Analysis
FEV offers investors a balanced exposure to European equities, with a strong performance record and dividend yield…
04 Nov 2019 Fund Analysis
Having been at the helm of the portfolio for over eight years, Sam Morse has proven himself as one of the better managers in the European sector…
24 Apr 2019 Nothing compares to EU
Currently one of the financial world's most unloved regions, we look at the sectors that are unique to Europe and how the persistent pessimism has presented attractive opportunities…
28 Nov 2018 Every cloud...
The endless grinding negativity of Brexit has driven investors away from Europe in scores, leaving rich pickings for opportunistic buyers...
26 Nov 2018 Fund Analysis
Fidelity European Values aims for long-term capital growth via a portfolio of European equities, managed with a conservative stockpicking approach...
26 Jul 2017 En Garde!
Europe is on the front foot, but investors are complacent about risks to the recovery in the longer term...
19 Jun 2017 The investment trust advantage...
Our event in June saw eight of the UK's most experienced fund managers discuss the outlook for each major asset class...
12 Jun 2017 Fund Analysis
21 May 2017 Brave new world
We ask the top managers in each sector, region and asset class where they see the opportunities in the months ahead...
18 Sep 2016 Fund Analysis
16 Sep 2016 Bargain hunt
Political chaos in Europe provides an opportunity to acquire exposure to some of the world’s largest multinationals at a significant discount...
View all

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