Fund Profile


This is a non-independent marketing communication commissioned by Fidelity Investments. 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.

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Fidelity European Trust (LON:FEV) follows a long-term disciplined investment approach that emphasises selecting stocks that can grow their dividends. Rather than being a traditional equity income fund, the team see a company’s dividend as a starting point to assess its strengths, rather than as an end in itself. This comes from a key observation that companies that can grow their dividends tend to outperform those that cannot. The implementation of a strategy around this observation has generated long-term outperformance that is characterised both by outperformance in rising markets, and resilient performance in falling markets. The team do not expect, however, for performance to come in short bursts of large outperformance; rather, a compounding of incremental outperformance.

FEV is managed jointly by Sam Morse and Marcel Stötzel. Sam has managed FEV since 2011 and has been at Fidelity for more than 20 years. Sam and Marcel are supported by a team of 174 global analysts, as well as a large team of sustainability specialists.

FEV is currently geared at c. 13%, which is the highest it has been under Sam’s tenure. Sam and Marcel are not concerned with market timing, so any decisions to increase or decrease gearing relate to their views on the prospects for their portfolio companies. Given the very large universe of stocks they have to pick from, their relatively concentrated portfolio of 40 to 50 stocks and the often global nature of company revenues, they are also less concerned that specific economic forecasts for Europe are key to their success.

FEV has a current dividend yield of 2.2% and a good track record of increasing its dividend over time. The current discount of 5% is narrower than average, following a period of very strong positive performance. The FEV board has used buybacks when the discount has widened into double digits, this happening as recently as 2022.

Analyst's View

FEV has a market capitalisation of c. £1.4bn, meaning its shares are relatively liquid and it has economies of scale. In turn, this means that its tiered management fee structure has a real impact on overall costs. Given that FEV also has an impressive and consistent long-term performance record, that opening line might seem like faint praise, but these things can really matter for long-term investors.

For some investors, what also really matters is that a fund can limit the downside in more difficult markets, while still capturing outperformance in better times. The team has done a really good job of this. FEV is not, to be clear, an absolute return fund, but a very strong emphasis on downside risks for portfolio companies has led to good relative performance in down markets.

Although the team are very much focussed on stocks, rather than any attempt to time markets, it is notable that FEV’s gearing is at its highest level since Sam became the trust’s manager in 2011, i.e. almost 13%. This reflects the change in gearing policy that was flagged in the 2020 annual report. FEV’s long-term consistent outperformance, its size and the team’s risk-averse investment style means that, in our view, it makes a strong claim to being the core European equity investment trust.


  • Active management does not rely on European macro factors to succeed
  • Risk-averse style may appeal to some investors
  • European equities remain at attractive valuations, even after a short-term bounce


  • European outlook remains clouded by war
  • FEV’s discount is narrower than the long-term average
  • Gearing can amplify both positive and negative returns
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2024 Kepler Growth Rated Fund

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

Fund History

15 May 2024 Why'd you have to go and make things so complicated?
European growth may be more complicated, and positive, than we suspected...
07 May 2024 Fund Analysis
FEV, impressive capital and dividend growth over many years...
24 Apr 2024 Is ESG finished?
Two of our analysts debate whether it’s time to give up on ESG…
17 Jan 2024 Top of the Pops
We reveal the winners of our investment trust ratings for 2024…
07 Jun 2023 Under pressure
We identify the equity trusts which have delivered the best downside protection in recent years...
05 Jun 2023 Fund Analysis
Fidelity European Trust: core, risk-averse European equity exposure...
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…
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
01 Jun 2022 Investing in Europe with investment trusts
How closed-ended funds can help you invest in Europe…
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…
20 Nov 2019 Making the grade: Kepler's rated trusts report strong performance in 2019
Earlier this year, we launched our new ratings for income and growth. Since then, the 40 trusts to have been awarded the elite Kepler Trust Intelligence ratings have performed strongly…
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, but some managers see rich pickings for those willing to take the risk...
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...
20 Sep 2017 Back to School…
Tim Stevenson, manager of the Henderson Euro Trust, discusses the economic and political backdrop for European equities…
30 Aug 2017 Smoke and mirrors?
We analyse whether investors should really focus on discounts and premiums when making their investment decisions...
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...
29 Jun 2017 Brave new world
We find out how the outlook appears today to you, and ask the top managers in each sector, region and asset class where they see the opportunities in it...
20 Jun 2017 Fund Analysis
A conservatively managed large cap equity portfolio which aims for companies that can grow their dividend consistently...
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...
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...
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Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.