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Fidelity European Trust net asset value falls amid war in Ukraine

21st Mar 2023 09:56

(Alliance News) - Fidelity European Trust PLC on Tuesday reported a lower net asset value in 2022, citing Russia's war in Ukraine, and resulting higher prices for grain, oil, energy and other commodities.

The Tadworth, England-based investment trust's NAV as at December 31 was down 5.8% to 337.87 pence from 358.68p a year prior. NAV total return was negative 3.6%. This however outperformed its benchmark, the FTSE World Europe excluding UK, which returned negative 7.0%.

Fidelity European Trust declared a dividend of 4.62 pence per share, up 11% from 4.18p a year ago. This brings the total dividend to 7.70p, up 13% from 6.83p a year ago.

With the expectation that inflation in Europe peaked at 10.6% in October 2022, Fidelity European noted a "tone of caution about the operating environment for the year ahead". It said its portfolio is well balanced regarding sector positioning.

Marcel Stotzel, co-portfolio manager, said: "The 'peace dividend' that markets have enjoyed over many years is substantially reduced with the market now also repricing risks of not just Eastern Europe but also other regions such as Taiwan and Korea. Additionally, the second order impact of the Ukraine invasion has been materially higher inflation and interest rate expectations over the coming years. All of the above has resulted in a sharp de-rating in the market, even if at an aggregate level, European corporate earnings are still expected to grow in 2023."

Fidelity European Trust shares were 1.4% higher at 331.00 pence each in London on Tuesday morning.

By Tom Budszus, Alliance News reporter

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Copyright 2023 Alliance News Ltd. All Rights Reserved.

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