Fidelity European (FEV)

Fidelity European Trust (FEV) is the largest European equity investment trust, with net assets of over £2bn. It has a long track record of outperformance under co-managers Sam Morse and Marcel Stötzel’s tenure, which has established its credentials as a ‘core’ European equity trust. Although the team describe their approach as risk averse, the portfolio is highly active, with 40–50 positions, and the aversion to risk describes the team’s careful assessment of every holding’s downside as well as upside.

One of the most important metrics the team considers is a company’s ability to pay and grow its dividend, and this is a central part of the investment process. This does not mean that the team are chasing yield, and the portfolio will normally have a lower yield but faster average earnings growth than then market. The key is really what a sustainable dividend says about a company’s risk profile. With short-term performance over one year trailing the benchmark, FEV’s portfolio yield is, unusually, at parity to the benchmark, which suggests to the team that the portfolio is undervalued.

In September 2025 FEV completed a combination with Henderson European (HET). FEV’s investment and dividend policies remain unchanged under the same management team as previously. The transaction itself was cost neutral to FEV shareholders, with FEV’s manager Fidelity contributing to costs. Management fees were slightly reduced, and this will result in lower ongoing Charges. The transaction also included a revised approach to managing FEV’s discount, targeting a mid-single-digit discount in normal market conditions. FEV’s current discount is c. 5% .