Fidelity European Values PLC

European Equities

Rated Fund 2019-20. Generates growth and income from quality companies      

Fidelity European Values proved a great addition to our Rated Funds in 2019 – it is one of the best performers in the European investment trust sector over the past year. A “consistent and measured application of an established process” saw Morningstar upgrade its analyst rating on the trust from bronze to silver in 2019.

Manager Sam Morse has been at the helm since 2011. 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. He favours firms with a strong track record, good return on capital, structural growth throughout the business cycle and an ability to generate cash. Valuation is important too; he is not prepared to pay any price for a good opportunity. In this regard, he is a ‘growth at a reasonable price’ (Garp) investor.

Morse views dividends as an indicator of a company’s ability to grow in a sustainable manner. The trust yields 3.4% and pays income half-yearly. Typically, it holds 50-60 stocks, and is well-diversified across countries, sectors and company sizes. When his conviction is high, Morse will use gearing to augment returns.

Given his focus on quality, the fund tends to protect capital better than peers in weaker markets, but it can lag when lower-quality stocks lead markets higher. Shares trade at a discount to net assets that has averaged 9.5% over the past three years.

Narrative and ratings content all as of January 2020.

See all Money Observer rated funds
Name
Fidelity European Values PLC
Manager
FIL Investments International
Type
Closed Ended Investment Company
ISIN
GB00BK1PKQ95
Sector
Europe
Launched
01/11/1991
OCF
0.87 %
Risk Rating
2
3 Year Sharpe
0.56
3 Year Alpha
6.00
Yield
2.4 %
Benchmark
FTSE World Eur Ex UK TR GBP
Fund Size
£ 1.04 billion
NAV
271
Gearing
107
Discount Premium
-7
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 7.31 %
Roche Holding AG Dividend Right Cert. 5.74 %
SAP SE 4.16 %
LVMH Moet Hennessy Louis Vuitton SE 4.05 %
Sanofi SACFD 3.81 %
Total SA 3.45 %
ASML Holding NV 3.32 %
Novo Nordisk A/S B 3.30 %
L'Oreal SA 3.18 %
Intesa Sanpaolo 3.03 %
Region %
Eurozone 63.49 %
Europe - ex Euro 31.72 %
Sector %
Financial Services 18.42 %
Healthcare 16.82 %
Industrials 14.61 %
Consumer Defensive 14.01 %
Technology 11.99 %
Consumer Cyclical 8.36 %
Basic materials 5.30 %
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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You should be aware that prices may fall as well as rise and that the income derived can go down as well as up. When buying or selling any investment that fluctuates in price or value you may get back less than you invested. Past performance is not necessarily a guide to future performance.