Ample European funds provide investors with an abundant selection of investment opportunities
In the realm of European investment trusts, three notable players stand out: Fidelity European Trust (FEV), JPMorgan European Growth & Income (JEGI), and European Smaller Companies Trust (ESCT). This article offers an in-depth look at Fidelity European Trust, with insights into the performance of the other two trusts based on their investment strategies.
Fidelity European Trust, with a market capitalization ranging from £1.65-£2.1 billion, has a price-to-earnings (P/E) ratio near 8 and a beta of 0.80. The trust focuses on continental European equities, with up to 20% outside Europe. Its recent trading below its 50-day moving average suggests short-term price weakness, but its mid single-digit discount to net asset value (NAV) and improved liquidity post-enlargement maintain long-term investment appeal.
The trust's co-manager, Sam Morse, emphasises a focus on stockpicking rather than macroeconomic or geopolitical analysis. The portfolio includes a diverse range of sectors such as banks, energy, and basic materials, as well as stocks like SAP, Roche, ASML, Nestlé, and L'Oréal, with no holding exceeding 4% of the portfolio. The average holding size is nearly £50 million for the 45 holdings, which may limit its ability to invest in smaller companies.
The enlarged Fidelity European Trust, following a merger with Henderson European Trust, will have £2.1 billion in assets. Fees for the enlarged trust are expected to be lower. The trust aims to maintain a mid single-digit discount to NAV and seeks to be a long-term core holding with broad European exposure.
Comparative investment performance specifics and future prospects for JPMorgan European Growth & Income (JEGI) and European Smaller Companies Trust (ESCT) were not found in the provided search results. However, based on their investment styles, certain inferences can be made:
- JPMorgan European Growth & Income (JEGI) likely offers more income stability through dividends, focusing on established, large-cap European stocks.
- European Smaller Companies Trust (ESCT) offers higher growth potential but with more volatility, focusing on smaller-cap stocks within Europe.
Investors often balance these trusts according to risk tolerance and desired income versus growth exposure. Fidelity European Trust’s recent trading below its 50-day moving average may reflect near-term market pressure, but it does not negate its strategic value within a diversified European equity portfolio.
For a comprehensive investment decision, further analysis including recent NAV, discount/premium to NAV, dividend yield, and total return history of all three trusts is recommended. It's worth noting that JEGI, a smaller competitor of Henderson European Trust, has a higher dividend yield at 4% compared to FEV's 2.25%.
In summary, Fidelity European Trust shows moderate valuation, stability, and liquidity with a broad continental focus and improved scale as of mid-2025. JPMorgan European Growth & Income and European Smaller Companies Trust serve complementary roles emphasizing income and smaller company growth, respectively, though direct recent performance data was not available for comparison.
Sam Morse, co-manager of Fidelity European Trust, divulges a focus on stockpicking over macroeconomic or geopolitical analysis in the trust's investment strategies. Boasting a mid single-digit discount to net asset value (NAV) and improved liquidity post-enlargement, the trust is appealing for long-term investors.
When considering a diversified European equity portfolio, investors may see the recent trading below the 50-day moving average of Fidelity European Trust as an opportunity to balance risk tolerance and income versus growth exposure, given the trust's moderate valuation, stability, and broad continental focus. However, for a complete comparison, it's crucial to conduct further analysis that includes JPMorgan European Growth & Income and European Smaller Companies Trust's recent NAV, discount/premium to NAV, dividend yield, and total return history, as these trusts serve complementary roles - providing income stability (JEGI) and higher growth potential with more volatility (ESCT), respectively.
