A country’s stock market is not a perfect mirror of its economy. In fact, depending on times and circumstances, the fortunes of the two can diverge significantly. As we head into another complicated year for the old continent, Fidelity European Trust (FEV) hopes to exploit the gap between Europe’s stumbling economy and the high-quality businesses listed on its markets. Their impressive track record suggests the managers might just pull it off.
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
- Clear quality strategy
- Excellent track record
- Some downside protection
- Discount to net asset value
Bear points
- Uncertain outlook for Europe
- Gearing could magnify losses
The biggest trust in the Association of Investment Companies’ Europe sector, Fidelity European, looks for quality companies at a reasonable price using a rigorous investment process. It focuses on companies that can grow their dividends sustainably over a three to five-year horizon.