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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.

FEV, impressive capital and dividend growth over many years...

Fidelity European Trust (FEV) is a £1.5bn FTSE 250 investment trust providing investors with a core European equity strategy. FEV's managers have generated superior performance on a consistent basis over many years, and under Sam Morse's tenure, beginning at the start of 2011, the NAV total return is c. 305 %, compared to the benchmark's c. 164%. This has contributed to FEV winning a Kepler Growth Rating for 2024. As well as generating strong performance, FEV scores well in our analysis of factors such as risk and downside protection, which are shown in the Performance section. FEV has a relatively concentrated portfolio of stocks, in the range of 40–50, and the team is primarily concerned with stock picking over making sector bets, with historical analysis showing that the bulk of returns come from individual stocks.

While FEV is not an equity income trust, the team's strategy places value on companies that pay growing and sustainable dividends, which means that FEV does produce a dividend somewhat higher than the average for its peer group and has a current yield of 2.2%. FEV has increased its dividend every year for the last 13 years, which coincides with Sam's tenure as manager.

FEV is geared c. 13%. The team does not try to time markets or dynamically adjust gearing, and the trust will typically be geared in the range of 10–15%. This is based on an analysis of what the best gearing for the strategy would be over the long term.

FEV is currently trading at a discount of c. 4%, narrower than the Morningstar Europe peer group average of c. 9%. Historically, the FEV board has acted when the discount is wider than 10% and utilised its buyback powers, most recently in 2022.

Analyst's View

As we discuss in the Discount section there are a number of factors we see contributing to FEV's relatively narrow discount, but probably the most fundamental of all is the trust's excellent performance record. Add in its size, which puts it on the radar for a broader range of investors, a responsive approach to managing the discount using share buybacks and a good dividend track record and it's not hard to see why the discount has proved quite resilient against a tough backdrop for investment trusts generally. While FEV's capital performance is impressive, the dividend growth achieved under Sam's tenure, over 350% , is a timely reminder that dividend growth can often come from trusts with lower initial starting yields. FEV is not an equity income trust, but the strategy places value on company dividends and this has paid off for FEV's investors over a period where CPI inflation has added up to about 50%.

In the Performance section we look at how investors have not yet reversed a trend that began in 2018 of pulling money from European equities, which in our view means that notwithstanding 2023’s good performance for the market generally and FEV specifically, there are probably many investors still underweight Europe. A shift in sentiment could see that change, which could be very positive for FEV’s performance and its discount. In our view FEV’s size, dividend growth, performance track record and core characteristics make for a compelling option for investors seeking to address their underweight position in European equities.


  • Strong long- and short-term performance record in capital and income terms
  • A change in investor sentiment towards European equities could be very constructive
  • Large, liquid trust makes for an ideal core holding in Europe


  • Income investors should note FEV is not, in spite of strong income growth, specifically an equity income trust
  • Sentiment to European equities has been weak for several years and could be hard to turn around
  • Strategic gearing amplifies losses as well as gains
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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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The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
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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.