Fidelity European Values PLC

European Equities

New for 2019. Generates growth and income from quality companies

Fidelity European Values has received Rated Fund status this year in the hope that it will continue to provide a more reliable and steady source of returns than outgoing fund Henderson European Focus.

The Fidelity investment trust benefits from experienced manager Sam Morse, who has been at the helm since 2011. He favours a bottom-up approach, conducting his own stock analysis and making good use of a well-resourced team of around 40 analysts.

He aims to deliver both capital growth and income over the medium to long term by holding high-quality names. He defines quality as growth that can be translated into a cash return to shareholders. Morse views dividends as an indicator of a company’s ability to grow in a sustainable manner. The trust yields more than 2% and pays income annually.

He favours companies focusing on four key areas: a good track record, good return on capital employed, structural growth throughout the business cycle and the ability to generate cash.

Valuation is important too, as he is not prepared to pay any price for a good opportunity. In this regard, he is a ‘Garp’ investor, looking for ‘growth at a reasonable price’.

The trust typically holds 50 to 60 stocks and is well diversified across countries, sectors and sizes of companies.

When conviction is high, Morse will use gearing to augment returns. At the end of 2018, the trust was almost 6% geared.

Given his focus on quality, the fund tends to protect capital better than peers in weaker markets, but can lag when lower quality stocks are leading markets higher.

Shares in the trust can typically be picked up at a discount to net assets of around 10%.

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Name
Fidelity European Values PLC
Manager
FIL Investments International
Type
Closed Ended Investment Company
ISIN
GB00BK1PKQ95
Sector
Europe
Launched
01/11/1991
OCF
0.88 %
Risk Rating
3
3 Year Sharpe
1.09
3 Year Alpha
3.74
Yield
2.5 %
Benchmark
FTSE World Eur Ex UK TR GBP
Fund Size
£ 952.72 million
NAV
254
Gearing
108
Discount Premium
-9
To achieve long-term growth in both capital and income by predominantly investing in equities (and their related securities) of continental European companies.
Holding %
Nestle SA 6.93 %
Roche Holding AG Dividend Right Cert. 5.40 %
Total SA 4.34 %
SAP SE 3.84 %
Euro Stoxx 50 Indx_fut 3.68 %
Sanofi SACFD 3.67 %
L'Oreal SA 3.42 %
Sampo Oyj A 3.19 %
Novo Nordisk A/S B 3.14 %
LVMH Moet Hennessy Louis Vuitton SE 3.14 %
Region %
Eurozone 61.02 %
Europe - ex Euro 29.36 %
United Kingdom 6.49 %
Sector %
Financial Services 18.61 %
Industrials 16.27 %
Healthcare 15.54 %
Consumer Defensive 12.65 %
Technology 10.80 %
Energy 7.29 %
Consumer Cyclical 6.81 %
Basic materials 5.28 %
Name
FIL Investments International
Address
TN11 9DZ, Tonbridge, United Kingdom
UCITS
No
Legal Structure
Closed Ended Investment Company

Managers

Sam Morse
Joined 01/01/2011

Sam Morse assumed responsibility for Fidelity European Fund on 1 January 2010 and the portfolio of Fidelity European Values on 1 January 2011. Prior to becoming a portfolio manager, Sam spent two years as a research analyst with Fidelity, covering a range of sectors, then six years as an equity income fund manager at Fidelity. He also worked as Head of Equities and Head of UK Equities at M&G from 1997 to 2003.

Data provided by Morningstar.

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