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Fund Profile

European Opportunities Trust 17 January 2024


This is a non-independent marketing communication commissioned by Devon Equity Management. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

EOT's portfolio of leading global companies, as well as the discount to NAV, offer strong recovery potential...

European Opportunities Trust (EOT) targets capital growth from a portfolio of European companies that the manager believes have special qualities. Unusually within its peer group, EOT invests on a pan-European basis, including the UK, which forms about one third of the portfolio.

Alexander Darwall has managed EOT since the inception of the strategy in January 1999 and has a significant personal holding. Devon Equity Management was founded in 2019 by Alexander and a number of key individuals from the previous management team, including co-manager Luca Emo, and the sole focus of Devon is European equities.

The investment team aim to identify companies that they believe have special, enduring qualities, often with international revenues, and several of EOT's largest holdings have been in the portfolio for many years. A lower management fee, detailed in the Charges section, was introduced in June 2023.

EOT has produced an NAV and share price total return of c. 38% and 32% respectively over the last five years, compared to figures of c. 63% and c. 57% for the Morningstar Europe peer group NAV total return and the benchmark respectively. Over ten years, EOT's NAV total return of 136% is in line with the peer group and ahead of the benchmark.

Since launch in 2000, EOT has produced an annualised NAV total return of 10.8% and an annualised price total return of 10.2%, which compares with an annualised total return from its benchmark, the MSCI Europe Index, of 5.8% over the same period.

EOT's discount has narrowed over the past year from c. 14% in December 2022 to its current c. 8% with the board undertaking significant buybacks and also introducing two 25% tender offers in the run-up to the AGM last November. The first tender offer will be held at the end of January 2024 and the second will be held in three years should the trust underperform its benchmark over the intervening period.

EOT is currently ungeared, versus an average c. 7% over the last five years. Gearing is used tactically and the team believe they currently have enough upside risk in the portfolio without the need for gearing, particularly taking into consideration the need to raise cash to meet the cost of the tender offer in January. The trust pays a small annual dividend and currently yields c. 0.4%.

Analyst's View

European equities remained off the radar for many investors during 2023, but EOT rose by about 17% in NAV terms, and its share price total return was almost 23% during the same period. We often say that continuation votes such as the one held by EOT late in 2023 are a backstop, that form a basis for discussion between the board and shareholders, and that’s what happened here, with the result that the board has introduced two tender offers and increased the tempo on buybacks, which together have helped to raise the share price faster than the NAV.

That said, long-term investment is mostly about companies and valuations, and EOT's portfolio offers investors a unique pan-European exposure to some leading global businesses. EOT has owned Novo Nordisk for over twenty years, long before it was Europe's largest company by market cap, a testament to the manager's long-term approach. EOT's five-year performance track record is still affected by its previous holding in Wirecard, and to help understand the context you can read about that here. Clearly the performance issues stemming from this one stock was a factor in shareholder discussions leading to the continuation vote. However, looking forward, investors seeking a high conviction recovery play on Europe, and a recovery play on an investment trust specifically, could see this a good time to revisit EOT.


  • Long-term track record overshadows shorter-term underperformance
  • Risk is reduced by eliminating gearing
  • Conditional tender offer in three years provides additional backstop to discount risk


  • Sentiment and macro factors in Europe remain weak
  • Conversely, some investors seeking a recovery in Europe may prefer a geared trust to increase their risk
  • EOT pays a minimal dividend, which may not suit some investors
Continue to Portfolio

Fund History

19 Jan 2024 Finding your Eurovision
As one of the top-performing sectors, why does Europe remain strangely out of favour with UK investors?
17 Jan 2024 Fund Analysis
EOT's portfolio of leading global companies, as well as the discount to NAV, offer strong recovery potential...
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25 Oct 2023 We’re going to need a bigger boat...
We argue corporate activity is picking up, making the investment trust sector an exciting place to invest…
23 Aug 2023 Halfway there…investing on a prayer
We provide an update on our picks for 2023 and see which analysts' prayers are being answered…
21 Jun 2023 Ça plane pour moi
Some of the world's biggest companies are doing just fine in Europe, yet investors shun the region. Time for a rethink...
19 Apr 2023 Are we nearly there yet?
We look at which trusts have done best year to date, and ask where there may be value…
16 Mar 2023 Diversity matters
We examine the effect of blending multiple funds within your regional allocation and find that – while the culture wars may rumble on elsewhere – the benefits of diversity for investors are unarguable…
04 Jan 2023 Here we go again
We review our ‘top picks’ for what was a wild year and place our bets for the year ahead – which doesn’t look much calmer…
16 Nov 2022 Fund Analysis
A sustainable growth portfolio for more uncertain times...
05 Oct 2022 European equities: Oui ou non?
Our analysts go head to head on the prospects for investors looking to the continent for prospective investments...
15 Jun 2022 Fund Analysis
EOT’s wide discount in historic terms may be an opportunity…
13 Oct 2021 Fund Analysis
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09 Sep 2021 What next for European equities?
After a strong period for European equity markets, we ask whether this trend can continue…
10 Mar 2021 Spring Conference '21
Audio and presentations from 21 of the UK’s leading investment trust managers…
04 Mar 2021 Slides and Audio: European Opportunities Trust
Download the presentation and listen to the audio from our 'Ideas for your ISA' Spring Conference on 02 March...
04 Mar 2021 Fund Analysis
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04 Feb 2021 Eurovision 2021
We highlight potential opportunities within the European investment trust space…
19 Aug 2020 Has the time come for Europe?
With mutual eurozone debt established all eyes are on the continent once more; but what will drive relative returns?
29 Jul 2020 To be, or not to be (geared), that is the question
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22 Oct 2019 Fund Analysis
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10 Apr 2019 Because they're worth it
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27 Feb 2019 A marathon not a sprint
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22 Feb 2019 Fund Analysis
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28 Nov 2018 Every cloud...
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07 Nov 2018 The Great British Buffett
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17 Oct 2018 Fund Analysis
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22 Aug 2018 Reassuringly expensive?
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09 Jul 2018 Go big or go home
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30 May 2018 Forza Italia!
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24 Jan 2018 Fishing in the right pond...
We analyse where active managers have been able to add the most value relative to their benchmark indices...
24 Jan 2018 Fund Analysis
A growth-orientated portfolio of high-quality companies listed across continental Europe and the UK with an almost unrivaled track record of outperformance...
19 Jan 2018 Full steam ahead?
Jupiter Fund of Investment Trusts manager Richard Curling gives his view on the potential risks and rewards for the major equity regions around the world in 2018...
20 Sep 2017 Back to School…
Tim Stevenson, manager of the Henderson Euro Trust, discusses the economic and political backdrop for European equities…
25 Jul 2017 En Garde!
Following a significant reversal in fortunes over the course of 2017, we analyse the outlook for the high-flying European equity market and the trusts that focus on it...
25 Jul 2017 Fund Analysis
One of the top performing trusts in any sector thanks a bottom-up approach and a focus on high-quality companies...
26 Apr 2017 The greatest...
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03 Feb 2017 Analysis: What next for European ITs?
Our analysis shows that European investment trusts have in recent years delivered strong returns to investors from their current discount, but risks abound in 2017...
24 Nov 2016 Investment trusts vs OEICs: The definitive guide
We take a look at how investment trusts really stack up against their open-ended fund rivals...
23 Nov 2016 Head-to-head: Four trusts that stack up well against their open ended counterparts...
We highlight the trusts that have outperformed their open-ended equivalent in NAV and price terms, have cheaper charges and are trading at wide discounts to their own history...
19 Sep 2016 Europe: A contrarian investor's view...
Political chaos in Europe provides an opportunity to acquire exposure to some of the world’s largest multinationals at a significant discount...
19 May 2016 Six reasons to invest in Europe
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25 Apr 2016 Fighting spirit
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21 Sep 2015 Investment trust news, research, strategy, analysis...
21 Sep 2015 Terms & Conditions
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