Investors in Europe find themselves in a position of abundant options when it comes to allocating their capital.
The Fidelity European Trust (FEV) has demonstrated a strong investment performance in the European sector, with an impressive track record since 2011. Under the leadership of manager Sam Morse, FEV has compounded its Net Asset Value (NAV) total return at 10.4%, outperforming its benchmark's 7.6%.
In the year-to-date performance up to July 2025, FEV achieved a 16.7% return, though it slightly underperformed the index in June 2025 due to weak stock selection in some sectors. Over a 5-year annualized period, FEV yielded a 10.9% return compared to a peer group index of 9.6%.
The trust focuses on stock picking with an emphasis on dividend growth, currently yielding about 2.0%. FEV's investment strategy focuses on "good quality at a reasonable price." The trust's average holding size of nearly £50 million for its 45 holdings will limit its ability to invest in smaller companies.
Notable holdings in FEV include SAP, Roche, ASML, Nestlé, and L'Oréal, with a bias towards growth, and banks, energy, and basic materials also represented. No single holding exceeds 4% of the portfolio.
In a significant development, FEV is set to merge with the Henderson European Trust (HET), announced in June 2025. FEV will be the continuing vehicle, creating the largest European equity investment trust with a market capitalization over £2 billion. Details on HET's standalone recent performance are not provided in the search results.
The enlarged Fidelity European Trust will have £2.1 billion of assets and aim to maintain a mid single-digit discount to NAV. The co-managers of Henderson European Trust left Janus Henderson, and the combined trust will now be merged into Fidelity European Trust (LSE: FEV).
Co-manager Sam Morse of Fidelity European Trust emphasizes stockpicking over macroeconomic or geopolitical analysis. Fees for FEV are expected to be lower, and the dividend yield moderately higher compared to the combined trust.
Meanwhile, ASML, Nestlé, and L'Oréal had a poor second half of 2024, falling 25% in value on average. Only Nestlé has had a respectable recovery in 2025, rising 9%. JPMorgan European Growth & Income (JEGI), a smaller fund compared to FEV, has a higher dividend yield at 4% compared to FEV's 2.25%.
JEGI's exposure to smaller companies is via a 2.5% holding in European Discovery Trust (JEDT), whose performance has improved in the past year due to management changes. However, JEGI's performance data is not available in the search results, limiting comparative analysis.
Elsewhere in the European trust sector, the European Smaller Companies Trust (ESCT) has recently bought back 42% of its share capital and is absorbing the underperforming European Assets Trust (EAT) to regain scale and lower management costs.
The top five holdings in FEV are SAP, Roche, ASML, Nestlé, and L'Oréal, with a bias towards growth. The European trust sector is shrinking, but investors still have a variety of choices in both the mainstream and smaller companies sector. Two-thirds of sales and profits for the companies in FEV come from outside Europe.
In conclusion, Fidelity European Trust (FEV) has a consistent long-term outperformance track record, a strong year-to-date return in 2025, and a forthcoming merger with HET that will reinforce its market position. However, the performance details of HET are missing from recent data, and JEGI’s performance is not reported in these search results, limiting comparative analysis for those two trusts. Further updated performance reports or fact sheets from HET and JEGI would be needed to fully assess and compare them with FEV.
Investing in the Fidelity European Trust (FEV) offers opportunities in both large-cap and growth-biased business sectors, including real-estate companies like L'Oréal and Nestlé. The trust's focus on stock picking for good quality companies at reasonable prices also extends to the finance sector, such as the holdings in banks.
In the European trust sector, the merger between FEV and Henderson European Trust (HET) will create the largest European equity investment trust, providing an avenue for investors to investing in businesses across various sectors, such as finance, real-estate, and more.
