Fidelity European Trust underperforms benchmark but hikes dividend

Fidelity European Trust PLC on Thursday hiked its dividend despite its net asset value total return underperforming the benchmark index in 2024.

The Tadworth, England-based investment trust said it delivered a NAV total return of 0.5% during 2024, below the FTSE World Europe ex UK Index which climbed 3.0%.

Fidelity European Trust declared a final dividend of 5.50 pence. The total dividend for 2024 is 9.10 pence, up 10% from 8.25 pence in 2023.

NAV per share fell 1.5% to 382.44 pence at the end of 2024 from 388.39 pence in 2023.

Chair Vivian Bazalgette said the longer-term performance of the fund ‘remains solid’ despite underperforming in 2024. It has outperformed the benchmark index over three, five and ten years.

‘Core Europe, particularly France and Germany, has well recognised political and economic problems, but the leading companies of the region are global in nature,’ Bazalgette said.

Fidelity European Trust said potential defence spending increases could ‘help to lift the European economy out of the doldrums, with the fiscal framework possibly more broadly loosened’.

‘One might be forgiven for thinking that the implications were negative for European equities, and yet so far this year they have outperformed those in the United States, with investors encouraged by the prospects for peace - at least in the short-term - and valuations that compare favourably. ’

Fidelity European Trust said the portfolio managers ‘remain focused on identifying attractively valued companies which will deliver consistent dividend growth over the long-term’.

Shares in Fidelity European Trust were down 0.8% to 403.22 pence in London on Thursday morning.

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