European Assets Trust underperforms benchmark, notes tariff impact
European Assets Trust PLC on Friday said European equities ‘held their ground in a volatile market’, as it underperformed its benchmark ahead of its proposed combination with European Smaller Cos Trust PLC.
The London-based trust, which invests in small to mid-cap EU companies, realised a NAV per share total return of 13.0% in the first half of 2025, coupled with a share price total return of 18.9%, whilst its benchmark, the MSCI Europe excluding United Kingdom Small Mid Cap (net return) Index returned 19.3% over the same period.
NAV per share at June 30 was 100.76 pence, rising 2.3% from 98.46p a year earlier.
Discussing the performance for the interim period, Chair Stuart Paterson said European markets performed ‘strongly’, as they ‘held their ground in a volatile market.’
The two best performing stocks were Dusseldorf, Germany-based defence manufacturer Rheinmetall AG up 204%, and Augsburg, Germany-based producer of mission-critical drive systems, Renk Group AG, up 99%.
European Assets said the companies benefited from good results and a favourable backdrop, notably the German government’s decision to ‘relax its debt brake to boost defence spending.’
Uncertainty surrounding US tariffs meant that Dublin-based packaging firm Smurfit WestRock PLC served as a drag on performance, shedding 26%.
Shares in European Assets Trust edged 0.6% higher to 96.40p on Friday afternoon in London.
The trust declared an interim dividend of 2.76p, down 6.4% from 2.95p a year earlier. This brought its total dividends announced for the year to 5.52p, down 6.4% from 5.90p.
Back in June, European Assets Trust agreed to merge with FTSE 250-listed European Smaller Cos Trust ‘to create the largest trust in the Association of Investment Companies European Smaller Companies sector.’
Should the combination be approved in October, said European Assets Trust, then these interims would represent the last set of reports and accounts for the trust.
Under the terms of the agreed reconstruction scheme, EAT will liquidate its shares and transfer assets to ESCT. EAT shareholders will have a rollover option, to acquire new shares in ESCT, or a cash option.
Looking ahead, Paterson said: ‘The investment outlook across European markets continues to strengthen. The proposed combination with ESCT represents a highly positive development for shareholders, creating an enlarged trust that is well positioned to capitalise on the attractive opportunities within the region.
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