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Fidelity European Trust PLC
|
Annual Report 2024
FIDELITY
EUROPEAN
TRUST PLC
Annual Report for the year ended 31 December 2024
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Investment Objective and Overview
Fidelity European Trust PLC aims
to be the cornerstone long-term
investment of choice for those
seeking European equity
exposure across market cycles.
The Company aims to achieve long-term growth in both
capital and income by predominantly investing in equities
(and their related securities) of continental European
companies.
Fidelity European
Trust plc
Sam Morse and Marcel Stötzel, your Portfolio
Managers seek companies based on their
prospects for producing dividends and
dividend growth as this indicates steady
structural growth. They search for companies
by focusing on four key areas: (i) positive
fundamentals, which includes structural
growth, disciplined use of capital and proven
business models; (ii) cash generation which
is often a good indicator of future dividend
growth; (iii) strong balance sheets which
ensure that the ability to grow dividends
is not jeopardised; and (iv) attractive
valuations providing good quality stocks
at a reasonable price. The portfolio will
generally have low turnover with a typical
holding period of three to five years. The
Portfolio Managers do not have a bias to
any particular sector or size of company and
outperformance is targeted through stock
selection rather than sector or country.
Investment Week Investment Company of the Year Awards 2024 – Europe Category.
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At a Glance
Fidelity European Trust PLC
|
Annual Report 2024
2020
2021
2022
2023
2024
Net Asset Value per Ordinary Share total return
1, 2
+23.5%
+9.7%
+0.5%
+17.5%
Year ended 31 December
-3.6%
2020
2021
2022
2023
2024
Ordinary Share Price total return
1, 2
+15.3%
+13.1%
Year ended 31 December
+21.7%
-3.8%
-0.1%
0.0
2.0
4.0
6.0
8.0
10.0
20202021202220232024
Dividends per Ordinary Share
6.50p
6.83p
9.10p
7.70p
Year ended 31 December
8.25p
-10 22
2020
2021
2022
2023
2024
FTSE World Europe ex UK Index total return
1, 3
+15.7%
+3.0%
+8.6%
Year ended 31 December
+17.4%
-7.0%
1 Includes reinvested income.
2 Alternative Performance Measures. See pages 74 and 75.
3 The Company’s Benchmark Index.
As at 31 December 2024
Shareholders’ Funds
£1,563.1m (2023: £1,587.5m)
Market Capitalisation
£1,438.7m (2023: £1,471.4m)
Capital Structure
Ordinary Shares of 2.5 pence held outside of Treasury
408,730,523 (2023: 408,730,523)
Summary of the key aspects
of the Investment Policy
The Investment Manager will typically focus on larger
companies which show good prospects for sustainable long-
term dividend growth. The Investment Manager is not restricted
in terms of size, industry or geographical split.
The Company predominantly invests in equities but may also
invest into other transferable securities, investment companies,
money market instruments, cash and deposits. It is also able
to use derivatives for efficient portfolio management in order
to gain additional market exposure (gearing) and also for
investment purposes.
The Investment Manager works within the guidelines set out in
the Investment Policy.
In the reporting year, the Company’s net asset value per ordinary share increased by 0.5% and
the ordinary share price decreased by 0.1%, whilst the Benchmark Index increased by 3.0% (all
performance data on a total return basis).
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2024 2023
Assets at 31 December
Gross Asset Exposure
1
£1,739.2m £1,796.0m
Gross Gearing
2
(see Note 18 on pages 72 and 73) 11.3% 13.1%
Net Market Exposure £1,739.2m £1,770.6m
Net Gearing
2
(see Note 18 on pages 72 and 73) 11.3% 11.5%
Shareholders’ Funds £1,563.1m £1,587.5m
Net Asset Value (“NAV”) per Ordinary Share
2
382.44p 388.39p
Ordinary Share Price and Discount at 31 December
Ordinary Share Price at year end 352.00p 360.00p
Ordinary Share Price – year high 411.00p 360.00p
Ordinary Share Price – year low 340.00p 311.50p
Discount at year end
2
8.0% 7.3%
Discount – year high 10.0% 9.6%
Discount – year low 2.5% 3.3%
Results for the year ended 31 December – see page 53
Revenue Return per Ordinary Share
2
10.41p 9.32p
Capital (Loss)/Return per Ordinary Share
2
(7.78p) 49.08p
Total Return per Ordinary Share
2
2.63p 58.40p
Final Dividend proposed per Ordinary Share 5.50p 4.99p
Interim Dividend paid per Ordinary Share 3.60p 3.26p
Total Dividends for the year 9.10p 8.25p
Ongoing Charges Ratio for the year ended 31 December
2, 3
0.76% 0.77%
1 The value of the portfolio exposed to market price movements.
2 Alternative Performance Measures. See pages 74 and 75.
3 Ongoing Charges Ratio (excluding finance costs and taxation) as a percentage of the average net asset values for the year (prepared in accordance with guidance
issued by the Association of Investment Companies). A definition of the Ongoing Charges Ratio is in the Glossary of Terms on page 85.
Total Return Performance
1
(%)
+0.5
-0.1
+3.0
+13.8
+10.9
+10.9
+54.2
+52.6
+41.4
+174.0
+175.8
+128.5
NAV per Ordinary Share
Ordinary Share Price
FTSE World Europe ex UK Index
10 years ended
31 December 2024
5 years ended
31 December 2024
3 years ended
31 December 2024
1 year ended
31 December 2024
Financial Highlights
1
See Glossary of Terms on page 86.
Sources: Fidelity and Datastream.
Past performance is not a guide to future returns.
Fidelity European Trust PLC
|
Annual Report 2024
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Annual Report 2024
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Contents
Strategy
Chairman’s Statement 02
Portfolio Managers’ Review 06
Spotlight on the Top 10 Holdings 10
Portfolio Listing 12
Distribution of the Portfolio 14
Attribution Analysis 16
ESG Ratings 17
Ten Year Record 18
Summary of Performance Charts 19
Strategic Report 21
Governance
Board of Directors 31
Directors’ Report 32
Corporate Governance Statement 36
Directors’ Remuneration Report 40
Statement of Directors’ Responsibilities 43
Report of the Audit Committee 44
Financial
Independent Auditor’s Report 47
Income Statement 53
Statement of Changes in Equity 54
Balance Sheet 55
Notes to the Financial Statements 56
Alternative Performance Measures 74
Financial Calendar 76
Information for Shareholders
Notice of Meeting 77
Shareholder Information 81
Data Protection 83
Glossary of Terms 84
Alternative Investment Fund Manager’s Disclosure 87
Chairman’s Statement
Read more on pages 02 to 05
Spotlight on the Top 10 Holdings
Read more on pages 10 and 11
Ordinary Share Price as at 31 December
2022
2023
2024
360.00p
352.00p
319.50p
Ten Year Record
Read more on page 18
Portfolio Managers’ Review
Read more on pages 06 to 09
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02
Fidelity European Trust PLC
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Annual Report 2024
Chairman’s Statement
2024 was a busy year on the political stage, with more
than half the world’s population going to the polls. But
while UK investors’ attention may primarily have been
caught by the elections at home and in the US, in Europe
the picture has been just as fractious, with right-wing
populists agitating for change in the key economies of
France and Germany, as well as making gains in the
European parliament. Despite this uncertain backdrop,
shares in European companies broadly advanced,
underpinned by trends such as the growth in artificial
intelligence, defence spending in an environment of
continued geopolitical tension, and the green energy
transition. With inflation moderating across the developed
world, the European Central Bank cut interest rates four
times between June and December, with further easing
expected in the year ahead.
As I discuss below, following seven years of
outperformance up to and including 2023, your Portfolio
Managers, Sam Morse and Marcel Stötzel, had a trickier
time in 2024. The core of their investment philosophy
lies in finding attractively valued companies with strong
balance sheets, business franchises and dividend growth,
which are not overly at risk from external factors such as
the macroeconomic or geopolitical backdrop. With the
economy and geopolitics both at the front of investors’
minds, the market narrative did not favour your Portfolio
Managers’ bottom-up stock picking approach. However,
Sam and Marcel remain dedicated to well-financed,
globally relevant businesses with good pricing power;
these factors should stand such companies in good stead
over the longer-term and offer some insulation from the
vagaries of politics and the economy. You can read more
about their experiences in 2024 in the Portfolio Managers’
Review which follows this report.
Performance
Shareholders who attended the AGM in May 2024 may
recall my observation that seven years of outperformance
was unusual, cautioning that even the best fund
managers underperform from time to time. These words
unfortunately turned out to be prescient, as the Company
did underperform its Benchmark Index (the FTSE World
Europe ex UK Index) in the year under review, with a NAV
total return of +0.5% compared with a total return of +3.0%
for the Benchmark Index. The share price total return was
–0.1%, reflecting a very slight widening in the discount to
NAV from 7.3% at the start of the year to just below 8.0%
at the year end. Underperformance, however inevitable
it may be from time to time, is always disappointing, but
perhaps some small comfort can be taken from the fact
that your Company beat the average return of its peers in
the Association of Investment Companies’ Europe sector in
both NAV and share price terms, as well as trading at a
narrower discount than their average.
I am pleased to present
theAnnual Report of Fidelity
European Trust PLC for the year
ended 31 December 2024.
Vivian Bazalgette, Chairman
£1,563.1m
(As at 31 December 2024)
Shareholders’ Funds
+0.5%
(Year ended 31 December 2024)
Net Asset Value per Ordinary Share total return
- 0.1%
(Year ended 31 December 2024)
Ordinary Share Price total return
+3.0%
(Year ended 31 December 2024)
Benchmark Index total return
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Annual Report 2024
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
The longer-term performance record remains solid
despite the underperformance in 2024. Your Company
has outperformed the Benchmark Index and the peer
group over three, five and 10 years, as well as since
Sam Morse’s appointment as your Portfolio Manager in
2011, generating annualised NAV and share price total
returns of 10.0% and 11.1% respectively over Sam’s tenure
to date, compared with 7.8% for the Benchmark Index.
I am delighted to report that the Company’s longer-term
performance was also recognised externally in the year
under review, winning the AJ Bell Investment Award in the
European Equity – Active category (which assesses open-
ended funds as well as investment trusts), the Citywire
Investment Trust Award for best European trust and the
Investment Company of the Year Award from Investment
Week in the Europe category.
Dividends
As part of their investment process, your Portfolio
Managers focus on companies that are capable of
growing their dividends over time. The Board does not
impose any income objective in any particular year,
recognising that both capital and income growth are
components of performance, as reflected in the investment
objective of the Company. We do, however, have a policy
whereby we seek to deliver a progressive dividend in
normal circumstances, paid twice yearly in order to smooth
dividend payments for the reporting year. Unlike open-
ended funds such as OEICs, investment trusts can hold
back some of the income they receive in good years,
thereby building up revenue reserves that can then be
used to supplement dividends during challenging times.
The Company’s revenue return for the year to
31 December 2024 was 10.41 pence per ordinary share
(2023: 9.32 pence), and an interim dividend of 3.60
pence per share was paid on 25 October 2024 (2023:
3.26 pence). The Board is pleased to recommend a final
dividend of 5.50 pence for the year ended 31 December
2024 (2023: 4.99 pence) for approval by shareholders at
the Annual General Meeting (“AGM”) on 8 May 2025. The
interim and final dividends (total of 9.10 pence) represent
an increase of 0.85 pence (10.3%) over the 8.25 pence
paid for the year ended 31 December 2023, and a 13th
consecutive annual increase in the full year dividend.
The final dividend will be paid on 13 May 2025 to
shareholders on the register at close of business on
28 March 2025 (ex-dividend date 27 March 2025).
Shareholders may choose to reinvest their dividends for
additional shares in the Company.
Outlook
Core Europe, particularly France and Germany, has well
recognised political and economic problems, but the
leading companies of the region are global in nature.
This is why the returns from continental European equities
have consistently defied the sceptics over the years.
While the economic performance of peripheral European
countries has been stronger in recent times, your Portfolio
Managers continue to believe that the soundest long-
term investment prospects are to be found in those
companies that typically originate from the core of Europe
(France, Switzerland and Germany) and trade globally.
Nevertheless, your Company’s exposure in peripheral
Europe does include Ryanair Holdings in Ireland, Novo
Nordisk in Denmark, Kone in Finland and Assa Abloy in
Sweden – all companies with leading franchises well
beyond their own shores. In addition, select smaller
companies have excellent growth potential, and a number
of these featurein the portfolio alongside the core of
global marketleaders.
At the time of writing, it appears that negotiations to
end the Russia-Ukraine war may involve a number of
changes in the geopolitical framework of Europe. A more
isolationist United States looks to be retreating behind its
North American carapace, while President Trump appears
determined to follow through on significant import tariffs.
This naturally threatens European security as well as
prosperity, not least given knock-on effects on agriculture
and raw materials, both in terms of supply and inflation.
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. In addition, heavy potential defence spending
could help to lift the European economy out of the
doldrums, with the fiscal framework possibly more broadly
loosened. The European Central Bank is furthermore in the
process of reducing interest rates.
If all this makes for a volatile outlook, your Portfolio
Managers’ continued focus on finding attractively valued
companies with good long-term capital and income
growth prospects should provide the opportunity for
positive performance in any event.
Fees
As mentioned in last year’s Annual Report, it is the
practice of the Board to review fees paid to the Manager
every third year. We did this in 2024, and the Directors
believe that the fees continue to represent good value for
shareholders.
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Fidelity European Trust PLC
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Annual Report 2024
OTHER MATTERS
Discount Management and Treasury Shares
The Board has an active discount management policy,
the primary purpose of which is to reduce discount
volatility. The Board also closely monitors the liquidity of
the Company’s shares as the recent lack of natural buyers
in the investment trust sector has put added pressure on
discount levels. The policy seeks to maintain the discount
to NAV in single digits in normal market circumstances.
Buying back shares at a discount also results in an
increase in the NAV per ordinary share.
To assist in managing the discount, the Board has
shareholder approval to hold ordinary shares repurchased
by the Company in Treasury, rather than cancelling them.
Shares in Treasury are then available to be reissued at
NAV per ordinary share or at a premium to NAV per
ordinary share, facilitating the management of and
enhancing liquidity in the Company’s shares. The Board is
seeking shareholder approval to renew this authority at the
AGM on 8 May 2025.
Despite an environment of wider discounts across the
investment trust universe, your Company’s discount to NAV
remained broadly in single digits throughout the year
under review, and no shares were repurchased.
Gearing
The Company continues to gear through the use of
derivative instruments, primarily contracts for difference
(“CFDs”), and the Portfolio Managers have flexibility to
gear within the parameters set by the Board, the rationale
being that over the longer-term carefully monitored levels
of gearing will enhance returns from a rising market. The
ability to do this is a key advantage of the investment trust
structure. As at 31 December 2024, the Company’s gross
gearing was 11.3% (2023: 13.1%), with net gearing also
at 11.3% (2023: 11.5%). In the reporting year, gearing was
maintained within the limits set by the Board and made
a positive contribution to both absolute and relative NAV
performance, as can be seen from the attribution analysis
table on page 16.
The Board monitors the level of gearing and the use of
derivative instruments carefully and has defined a risk
control framework for this purpose which is reviewed at
each Board meeting. It should be emphasised that all
gearing is subject to the Portfolio Managers’ confidence in
identifying attractive investment opportunities, and to their
remaining attractive.
Chairman’s Statement continued
Board of Directors
As I indicated in last year’s Annual Report, I have now
completed nine years’ service on your Board, and in
accordance with best practice, I will step down at the
conclusion of the AGM on 8 May 2025. Paul Yates, as the
Senior Independent Director, led an exercise to identify
my successor, and in October 2024 we were delighted to
announce the appointment of Davina Walter to the Board,
and she will succeed me as Chairman at the conclusion
of the AGM. Davina is an experienced investment
professional, non-executive director and chairman, with
40 years of experience in the investment trust sector.
We believe she is an excellent candidate to lead your
Company in the coming years, and I wish her all the very
best in her new role.
We continue to review Board composition and Directors’
succession on a regular basis to ensure that we have
a Board with a mix of tenures and one which provides
diversity of perspective together with a range of skills
and appropriate experience for your Company. Following
my retirement, our Board will number three women and
two men, with an average tenure of four years and nine
months. Paul Yates is due to retire at the 2026 AGM when
he will have completed nine years of service and his
replacement as a non-executive Director will be recruited
before then. In accordance with the UK Corporate
Governance Code for Directors of FTSE 350 Companies,
all Directors will be subject to re-election and in Davina’s
case election at the AGM on 8 May 2025. The Directors’
biographies can be found on page 31, and between
them, they have a wide range of appropriate skills and
experience to form a balanced Board for the Company.
Continuation Vote
In accordance with the Articles of Association, your
Company is subject to a continuation vote every two
years. The next continuation vote will take place at this
year’s AGM on 8 May 2025. At the last continuation vote
in May 2023, it was pleasing to see strong evidence of
shareholder support from the 99.86% of votes cast in favour
of continuation of the Company. The enfranchisement
of shareholders is a key advantage for investment trust
investors over open-ended company investors, and we
would urge all shareholders to use their vote at the
forthcoming AGM.
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Annual Report 2024
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Articles of Association
The Board is proposing to move to an aggregate cap on
Directors’ fees in line with market practice and to provide
greater flexibility. The proposed new cap is £350,000 in
aggregate per annum, replacing the existing cap of £50,000
per Director per annum which was put in place in 2010.
We have also taken the opportunity to make other
changes of a minor or technical nature, including
clarifications in relation to hybrid general meetings
to follow how practice has developed. However, the
amendments do not provide for, and the Board has no
intention to move to, fully virtual meetings. A full tracked
version of all the changes proposed to the Articles is
available at www.fidelity.co.uk/europe. The Articles will
be subject to shareholder approval at the AGM on 8 May
2025 and the principal changes proposed to the Articles
are set out in more detail in the Directors’ Report on page
35.
Annual General Meeting
The Company’s AGM will be held at 11.00 am on
Thursday, 8 May 2025 at 4 Cannon Street EC4M 5AB and
virtually via the online Lumi AGM meeting platform.
The AGM provides a great opportunity for shareholders
to meet the Company’s Directors, and of course, for
us to meet you, and hear first-hand from your Portfolio
Managers. We hope to see as many of you as possible on
the day. Full details of the AGM are below.
Vivian Bazalgette
Chairman
19 March 2025
ANNUAL GENERAL MEETING – THURSDAY, 8 MAY 2025 AT 11.00 AM
The AGM of the Company will be held at 11.00 am on Thursday, 8 May 2025 at 4 Cannon Street, London EC4M 5AB
(nearest tube stations are St Paul’s or Mansion House) and virtually via the online Lumi AGM meeting platform.
Full details of the meeting are given in the Notice of Meeting on pages 77 to 80.
For those shareholders who are unable to attend in person, we will live-stream the formal business and presentations
of the meeting online.
Sam Morse and Marcel Stötzel, the Portfolio Managers, will be making a presentation to shareholders highlighting the
achievements and challenges of the year past and the prospects for the year to come. They and the Board will be very
happy to answer any questions that shareholders may have. Copies of their presentation can be requested by email
at investmenttrusts@fil.com or in writing to the Secretary at FIL Investments International, Beech Gate, Millfield Lane,
Lower Kingswood, Tadworth, Surrey KT20 6RP.
Properly registered shareholders joining the AGM virtually will be able to vote on the proposed resolutions. See Note 9
to the Notes to the Notice of Meeting on page 79 for details on how to vote virtually. Investors viewing the AGM online
will be able to submit live written questions to the Board and the Portfolio Managers and we will answer as many of
these as possible at an appropriate juncture during the meeting.
Further information and links to the Lumi platform may be found on the Company’s website at www.fidelity.co.uk/
europe. On the day of the AGM, in order to join electronically and ask questions via the Lumi platform, shareholders
will need to connect to the website https://web.lumiagm.com.
Please note that investors on platforms, such as Fidelity Personal Investing, Hargreaves Lansdown, Interactive Investor
or AJ Bell Youinvest, will need to request attendance at the AGM in accordance with the policies of your chosen
platform. They may request that you submit electronic votes in advance of the meeting. If you are unable to obtain a
unique IVC and PIN from your nominee or platform, we will also welcome online participation as a guest. Once you
have accessed https://web.lumiagm.com from your web browser on a tablet or computer, you will need to enter the
Lumi Meeting ID which is 124004169. You should then select the ‘Guest Access’ option before entering your name and
who you are representing, if applicable. This will allow you to view the meeting and ask questions, but you will not be
able to vote.
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Fidelity European Trust PLC
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Annual Report 2024
Portfolio Managers’ Review
Sam Morse was appointed as
Portfolio Manager of Fidelity
European Trust PLC on 1 January
2011. He has also managed the
Fidelity European Fund since
1December 2009. He first joined
Fidelity as a research analyst and
covered a range of sectors before
becoming an equity income fund
manager. He also worked as
Head of Equities at M&G.
Marcel Stötzel was appointed
as Co-Portfolio Manager of
Fidelity European Trust PLC on
1 September 2020. He joined
Fidelity as an analyst in 2014
covering US Tech before moving
on to cover European Software
and IT Services and thereafter
European Aerospace, Defense
and Airlines. After a highly rated
period in research, he became
a Portfolio Manager and he has
co-managed the Fidelity European
Fund since September 2020. Prior
to joining Fidelity, he worked as an
investment banker at Barclays. He
holds an MBA (INSEAD) and is a
CFA charter holder.
Marcel Stötzel,
Co-Portfolio Manager
Sam Morse,
Portfolio Manager
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Annual Report 2024
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Question
Firstly, congratulations on winning
multipleawards for Active European
Equity fund management this year.
Howhas the Company performed
intheyear to 31 December 2024?
Answer
Sam: Thank you, but as our shareholders will know,
awards recognise past performance. They are, of course,
gratefully received but the stock market often likes to teach
award-winners a lesson. And thus, this was the case for
us in 2024. At the half-year stage, the Company’s NAV
was still slightly above the Benchmark Index, which our
shareholders may remember from the Half-Yearly Report.
But, just as the awards rolled in, the tide went out for the
European stock markets, especially in UK sterling terms,
and for our relative performance. Investors’ fears that
interest rates might not come down as quickly as expected
were heightened by the election of President Trump,
and the likely consequences in terms of tariffs and other
policies. The Company’s portfolio fares less well when
bond yields rise, as they did in short order, but our stock
holdings detracted from returns as well. So, for the year
under review, the Benchmark Index rose +3.0% while the
Company’s NAV total return was +0.5%. The widening of
the discount meant that the share price return was -0.1%.
Question
What stocks have been the main drivers
of performance in 2024?
Answer
Marcel: The main contributors were: 3i which continued
strong like-for-like store sales as well as store expansions
at key holding Action, SAP was driven by strong product
adoption (as detailed below) and margin performance
and MTU as a result of strong aftermarket sales
performance as well as successfully fixing the geared
turbofan (GTF) engine issues.
The main detractors were: L’Oréal, which in a tough
China environment, has seen growth in the short-term
and expectations for the long-term decelerate, Nestlé
mismanaged the pricing and cost relationship through
Covid, and over the post Covid inflationary period,
and thus had to reset medium-term guidance. Dassault
Systèmes struggled with the Medidata acquisition as well
as weakness from their autos and industrials customers.
Below are the top five stock contributors and detractors to
performance in the Company’s reporting year.
Top 5 Stock Contributors (on a relative basis) %
3i Group +1.2
SAP +1.1
MTU Aero Engines +0.7
EssilorLuxottica +0.6
Intesa Sanpaolo +0.5
Top 5 Stock Detractors (on a relative basis) %
L’Oréal -0.8
Nestlé -0.8
Dassault Systèmes -0.5
Novo Nordisk -0.5
TotalEnergies -0.5
Question
Give an example of how your bottom-up
stock selection process has added value
to the Company this year?
Answer
Marcel: A notable example would be SAP. I covered SAP as
an analyst 10 years ago and even back then the company
and investors were talking about the massive potential
of its enterprise resource planning software called S/4
HANA. Fast forward nine years later (an incredibly long
time in technology) and the jury was still out on whether
SAP’s customers would adopt S/4 HANA or not. After
doing a significant amount of work with the current Fidelity
analyst that covers SAP, we came to the conclusion that
this long adoption cycle was mainly customers waiting for
the technology to mature and also large customers such
as Nestlé or Samsung needing several years to get their
IT systems in order before they could begin migrating.
Additionally, we discovered SAP has both a carrot and a
stick to “nudge” customers towards adoption - the carrot
being great new functionality (including new Artificial
Intelligence offerings), and the stick being the fact that SAP
will stop supporting older software versions of S/4 HANA
from 2027-2030. All of this gave us strong conviction that S/4
HANA adoption would be a case of “when, and not if” and
this proved to be the case in 2024 and led to the impressive
performance of the Company.
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Annual Report 2024
and thus we have been reducing exposure to companies
that we feel could have nasty refinancing surprises in 2025.
At the portfolio level, higher interest rates are a matter
of puts and takes – some companies such as banks will
benefit from “higher for longer” interest rates while other
companies such as construction or consumer spending
exposed sectors will be hurt by high rates. Having said
that, we do not explicitly take a view on macro variables
such as the direction of interest rates, and thus would
expect bottom-up stock picking to continue to be the main
driver of the Company’s performance.
Question
How would you describe the outlook for
continental Europe and does this correlate
with your thoughts on the individual
companies you invest in?
Answer
Sam: As we have often said, the macroeconomic
backdrop does not reflect the outlook for individual
European companies. Although the outlook for continental
Europe is uncertain and faces challenges, we are excited
about the prospects for the individual companies in which
we invest. However, ageing populations, high levels of
government debt and a lack of structural reform have
curtailed growth in the region and give us reasons to be
cautious. The Draghi report provides a sensible blueprint
for improvement, but it is unlikely to be acted on in full
while Europe remains mired in fragmented national
politics. There is some hope that Germany, post elections,
will look to release the legal hand brake on fiscal
expansion. Does this matter for the companies we invest
in? In part, yes, but European companies have often kept
pace with global indices (admittedly not in 2024) because
they are less and less reliant on the domestic European
economies (two-thirds of sales and profits now comes
from outside Europe). Also, there have been many studies
showing that there is a tenuous link between regional
economic growth and the performance of regional
stock markets. The real dividend growth of constituent
companies is much more important as are other crucial
factors like the profitability of industry structures and
corporate governance. So, although we are cautious on the
outlook for continental Europe, we remain excited about
the prospects for the individual companies held in the
portfolio.
Portfolio Manager’s Review continued
Question
This year has been full of political change
around the world as well as Europe. How
has this affected the portfolio? And how
do you think about geopolitical risk within
the portfolio?
Answer
Sam: 2024 was a year of elections; some outcomes
were expected, others were not. As mentioned already,
President Trump’s election, although expected by many,
still resulted in rising bond yields because his policies on
tariffs and immigration may be inflationary. This did not
help the Company’s portfolio which has a preponderance
of bond-like steady dividend growers that fare less well, at
least in the short-term, in a more inflationary environment.
The unexpected French parliamentary elections also hurt
the Company’s performance. The portfolio is overweight
companies listed in France because there are many
world-leading franchises, like LVMH Moët Hennessy and
L’Oréal, which have a long history of dividend growth.
These companies garner the vast majority of their revenues
and profits from outside France, but when investors are
nervous about French sovereign exposure, they will get
sold too in the general meltdown — probably more than
they should. Many of our investors will know that Marcel
and I stick to a policy of keeping large sector groupings
balanced within five percentage points of the benchmark
level. This balance normally dampens down other factorial
risks, including geopolitical risks, across the portfolio, such
that it is the stock-picking that drives performance over
meaningful time periods. We still believe that will be the
case in the longer-term.
Question
With interest rates still much higher than
previous years, what impact does this
have on the companies you invest in?
Answer
Marcel: The most direct impact is that finance costs for
companies in which we invest rises when interest rates rise.
However, the reality is a bit more nuanced. Many CFOs
of the companies we invested in took out fixed rate debt
during the depths of Covid in 2020. This debt typically has
a 5-year fixed interest rate period which means that many
of our investee companies have not yet felt the pain from
higher interest rates. We expect this may change in 2025,
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Question
How does Fidelity European Trust PLC
differentiate itself in comparison to other
European equity funds or in comparison
to other regions, and what advantages
orchallenges does this present?
Answer
Sam: Our primary area of differentiation comes from
our focus on dividend growth, i.e. investing in companies
that consistently grow their dividends year after year.
While many investors focus on dividends or growth, we
feel that focusing on both factors at the same time gives
us an edge. We hope as a result of this philosophy and
our bottom-up stock picking, we differentiate ourselves
from the European benchmark over time. Our investment
objective is to outperform the Benchmark Index by 1 to
2% per annum post fees. If successfully achieved, it will
differentiate your Company from most other European
equity funds over the years. This is, of course, easier said
than done and always a challenge! Recently, European
funds have differentiated themselves from other regional
funds negatively via lacklustre relative performance. This
has led to considerable outflows from European regional
funds. European stock markets, as a result, appear to be
trading at a significant valuation discount, on a like for
like basis, to other regions, in particular the US. Clearly,
the sectoral and geographic mix of Europe is different to
the US too, for example, less technology and a greater
exposure to emerging markets including China. We still
believe there is a strong case for diversification especially
now that sentiment towards Europe is so negative.
European companies, carefully selected, have beaten most
global indices over longer periods of time.
Question
The dividend has increased for thirteen
consecutive years, putting the Company
on the AIC’s ‘next generation’ of
dividend heroes. How do you look at
dividends versus growth when making
aninvestmentdecision?
Answer
Marcel: We do not view growth and dividends as mutually
exclusive. While clearly, we do not expect or desire a
large dividend from a high growth company, we feel
that very few companies have an excuse for not having
at least a small dividend. An example of this is ASML,
a company with enormous investment requirements and
growth opportunities given their crucial role in enabling
global semiconductor manufacturing. Even ASML pays a
circa 1% dividend yield and notably has grown its dividend
every year since 2009. This highlights another important
point. While the €0.20 dividend paid in 2009 may not have
seemed high (it was also around a 1% dividend yield at
the time), ASML’s dividend has grown 30x to be over €6
by 2024. Thus, clearly not only is an attractive starting
dividend yield important, but a rapidly growing dividend
can also make for a fantastic investment.
Question
Looking forward into 2025 and beyond,
which sectors and regions are you
particularly excited about?
Answer
Sam: We do not really invest on a top-down basis. Like
most fund managers at Fidelity, we are bottom-up stock
pickers. Our particular focus, in this respect, is to identify
attractively valued cash-generative companies, with strong
balance sheets, that we expect to grow their dividends
on a three-to-five-year horizon. So, we do not get excited
about sectors and regions but about individual companies.
In fact, as mentioned before, we try to stay balanced by
sector, such that the stock picking drives performance
rather than allocation to certain sectors or regions.
Answer
Marcel: I would say what most excites us looking forward
to 2025 is seeing how the more mainstream adoption
of artificial intelligence (“AI”) will benefit a number of
different stocks. This could range from technology stocks
such as ASML and SAP to more “hidden” AI players such
as Legrand (which sell products that are essential to
datacentres such as transformers, Power Distribution Units,
cooling, etc.). Additionally, we expect to see 2025 being
the year that adopters of AI start to realise more tangible
benefits, with financial services firms in particular, being
well placed to reap the gains from AI.
Sam Morse
Portfolio Manager
19 March 2025
Marcel Stötzel
Co-Portfolio Manager
19 March 2025
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Annual Report 2024
Spotlight on the Top 10 Holdings
as at 31 December 2024
(Based on Asset Exposure expressed as a percentage of Net Assets. Asset Exposure comprises
the value of direct equity investments plus market exposure to derivative instruments.)
LVMH Moët Hennessy (France)
% of Net Assets
4.5%
LVMH Moët Hennessy is a multinational luxury goods conglomerate which prides itself on being
a world leader in luxury. It owns more than 75 prestigious brands across all major sectors of
the luxury market: wine and spirits, fashion and leather goods, perfume and cosmetics, watches
and jewellery and selective retailing. Among the most renowned names in its stable are Dom
Perignon, Moët & Chandon, Christian Dior, Marc Jacobs, Acqua di Parma and Chaumet. In the
last few years, there has been a continued focus on the improvement of production methods and
the development of digital activities. The high-quality brands and favourable supply/demand
dynamics ensure that LVMH has strong pricing power.
Industry Personal Goods
SAP (Germany)
% of Net Assets
5.9%
SAP provides enterprise application software and business solutions to many of the world’s
leading multinationals including well known names such as Vodafone, Nestlé, Mercedes-
AMG Petronas and Microsoft. Established by a small entrepreneurial team in 1972, today
SAP has more than 100,000 employees, serving 400,000 customer businesses in over 100
countries around the world.
Industry Software and Computer
Services
ASML (Netherlands)
% of Net Assets
5.8%
ASML is the largest supplier globally of photolithographic systems for the semiconductor
industry. It has an effective monopoly making the machines that are an essential component of
chip manufacturing. It has an increased digital penetration as software proliferates driving the
need for cutting edge chips. This provides a long runway for growth and capital expenditure
growth from its customer base, which includes most of the world’s leading chip manufacturers
including Intel and Samsung. As a monopoly supplier, ASML has very strong pricing power
and can grow in excess of the overall semi-conductor equipment market.
Industry Technology Hardware and
Equipment
Novo Nordisk (Denmark)
% of Net Assets
5.5%
Novo Nordisk is a global pharmaceuticals company and has production sites in five
continents and research and development facilities in Demark, China and the US. The
company’s mission is to drive change and defeat diabetes and other serious chronic
diseases by discovering and developing innovative biological medicines and distributing
these around the world. It produces half of the world’s supply of insulin and has had great
success with the launch of its GLP-1 products that are proven effective treatments to manage
obesity and even heart disease.
Industry Pharmaceuticals and
Biotechnology
Nestlé (Switzerland)
% of Net Assets
4.7%
Nestlé is the world’s largest food and beverages company, with more than 2,000 brands,
selling in over 180 countries. It was founded over 150 years ago in the merger of the Anglo-
Swiss Milk Company established in 1866 by Charles and George Page with Farine Nestlé. It
expanded significantly during both World Wars – broadening its product set beyond its milk
and infant formula ranges. In recent years, the company has been investing in plant-based
food, as well as other areas that will support future growth including infant and pet nutrition.
Industry Food Producers
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
L’Oréal (France)
% of Net Assets
3.3%
L’Oréal is the leading beauty manufacturer worldwide and has over 30 brands and a
presence in over 120 countries. Demographic trends, particularly in emerging markets with
their expanding middle class, are supportive. Research and development remain a priority
for the management team which stresses the need for innovation and superior quality in a
world of ratings and reviews.
Industry Personal Goods
EssilorLuxottica (France)
% of Net Assets
3.9%
EssilorLuxottica is the largest distributor of ophthalmic lenses, frames and sunglasses.
Formed by the merger in 2018 of Essilor (founded in 1849) and Luxottica (founded in 1961),
the combined company has over 11,000 patents and over 180,000 employees. The result
is a vertically integrated business that seeks to provide innovative lenses and frames to
improve the lives of its customers.
Industry Medical Equipment and
Services
Hermès International (France)
% of Net Assets
3.2%
At the top of the luxury pyramid in terms of exposure to ultra high net worth individuals,
Hermès International offers leather goods, ready-to-wear clothing, perfumes, and watches
among other goods. The family/management team have managed to blend desirability,
supported by excellent quality, and scarcity to create some of the most coveted products in
the world. This enables Hermès not only to grow whatever the economic weather, but also
to price through cycle, underspend versus peers on advertising & promotional spending,
and hold tighter working capital. This creates a business with defensive and consistent
through cycle organic growth.
Industry Personal Goods
Roche (Switzerland)
% of Net Assets
4.3%
Roche is one of the world’s leading and largest biotechnology companies. It aims
to improve the standard of care across oncology, immunology, infectious diseases,
ophthalmology and neuroscience. In 1990, the group acquired a 60% stake in Genentech
(US biotech), and in 2009, it acquired the remaining 40%. Genentech has been one of the
most productive biotech names in the last 20 years – with the invention of Herceptin, Rituxan
and Avastin, among others.
Industry Pharmaceuticals and
Biotechnology
TotalEnergies (France)
% of Net Assets
4.0%
TotalEnergies is a multi-energy company that produces and markets fuels, natural gas
and electricity. It has a presence in more than 130 countries and has a total hydrocarbon
production of almost 3m barrels of oil equivalent per day. The company was founded after
the First World War, when French president Raymond Poincaré encouraged the creation of
a French oil company. Today, TotalEnergies has more than 100,000 employees across the
globe and has refocused on more renewable energy sources including solar, wind, biomass,
hydrogen and electricity, as well as the traditional natural gas and oil business.
Industry Oil, Gas and Coal
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Annual Report 2024
The Asset Exposures shown below and on the next page measure exposure to market price movements as a result of owning shares
and derivative instruments. The Fair Value is the actual value of the portfolio as reported in the Balance Sheet. Where a contract for
difference (“CFD”) is held, the Fair Value reflects the profit or loss on the contract since it was opened and is based on how much the
share price of the underlying share has moved.
Asset Exposure Fair Value
£’000 %
1
£’000
Long Exposures – shares unless otherwise stated
SAP (long CFD)
Software and Computer Services 91,669 5.9 (2,077)
ASML
Technology Hardware and Equipment 91,352 5.8 91,352
Novo Nordisk
Pharmaceuticals and Biotechnology 85,263 5.5 85,263
Nestlé
Food Producers 72,817 4.7 72,817
LVMH Moët Hennessy
Personal Goods 70,711 4.5 70,711
Roche
Pharmaceuticals and Biotechnology 67,613 4.3 67,613
TotalEnergies
Oil, Gas and Coal 63,055 4.0 63,055
EssilorLuxottica
Medical Equipment and Services 60,223 3.9 60,223
L'Oréal
Personal Goods 52,047 3.3 52,047
Hermès International
Personal Goods 49,970 3.2 49,970
Ten largest long exposures 704,720 45.1 610,974
Other long exposures
Partners Group 48,795 3.1 48,795
Deutsche Börse Group 47,304 3.0 47,304
3i Group 46,115 3.0 46,115
Legrand (long CFD) 44,780 2.9 (936)
Assa Abloy 42,840 2.8 42,840
Sanofi 42,111 2.7 42,111
Intesa Sanpaolo 37,849 2.4 37,849
Linde (long CFD) 37,643 2.4 (1,626)
Amadeus IT Group 35,605 2.3 35,605
Sampo 34,823 2.2 34,823
Kone 34,746 2.2 34,746
AXA 33,417 2.1 33,417
MTU Aero Engines 29,723 1.9 29,723
Symrise 29,318 1.9 29,318
Portfolio Listing
as at 31 December 2024
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Asset Exposure Fair Value
£’000 %
1
£’000
KBC Group 29,158 1.9 29,158
Lonza Group 28,363 1.8 28,363
Bankinter 27,833 1.8 27,833
Sika 27,039 1.7 27,039
DNB 25,628 1.6 25,628
Epiroc 25,423 1.6 25,423
Intertek Group 25,242 1.6 25,242
Dassault Systèmes 24,997 1.6 24,997
EQT 24,023 1.5 24,023
Veolia Environnement 23,981 1.5 23,981
Ryanair Holdings (long CFD) 22,567 1.4 (36)
DKSH Holding 22,214 1.4 22,214
Société des Bains de Mer de Monaco 20,423 1.3 20,423
SIG Group 20,385 1.3 20,385
ABN AMRO Bank 19,743 1.3 19,743
DSM-Firmenich 17,682 1.2 17,682
Sodexo 15,940 1.0 15,940
PUMA 14,395 0.9 14,395
Edenred 11,327 0.8 11,327
Tecan Group 8,279 0.6 8,279
Total long exposures before long futures 1,684,431 107.8 1,483,097
Long Futures
EURO STOXX 50 Future March 2025 54,743 3.5 (1,121)
Gross Asset Exposure
2
1,739,174 111.3
Portfolio Fair Value
3
1,481,976
Net current assets (excluding derivative liabilities) 81,153
Shareholders’ Funds (per Balance Sheet) 1,563,129
1 Asset Exposure is expressed as a percentage of Shareholders’ Funds.
2 Gross Asset Exposure comprises market exposure to investments of £1,487,772,000 (per Note 10: Investments on page 63) plus market exposure to derivative instruments
of £251,402,000 (per Note 11: Derivative instruments on page 64).
3 Portfolio Fair Value comprises investments of £1,487,772,000 less derivative liabilities of £5,796,000 (per the Balance Sheet on page 55).
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Annual Report 2024
The table below and on the next page details the Distribution of the Portfolio based on Asset Exposure which measures the exposure
of the portfolio to market price movements as a result of owning shares and derivatives instruments.
France
Switzerland
Germany
Netherlands
Denmark
Finland
UK
Spain
Italy
Sweden
Other
Future
Total 2024
1
Index 2024
2
Total 2023
1,3
Financials
Investment Banking and Brokerage
Services – 3.1 3.0 – – – 3.0 – – 1.5 – – 10.6 4.1 10.8
Banks – – – 1.3 – – – 1.8 2.4 – 3.5 – 9.0 9.5 7.2
Non-Life Insurance 2.1 – – – – 2.2 – – – – – – 4.3 6.1 4.3
Life Insurance – – – – – – – – – – – – – 0.6 –
2.1 3.1 3.0 1.3 – 2.2 3.0 1.8 2.4 1.5 3.5 – 23.9 20.3 22.3
Health Care
Pharmaceuticals and Biotechnology 2.7 6.1 – – 5.5 – – – – – – – 14.3 12.3 14.4
Medical Equipment and Services 3.9 0.6 – – – – – – – – – – 4.5 3.0 4.3
Health Care Providers – – – – – – – – – – – – – 0.3 –
6.6 6.7 – – 5.5 – – – – – – – 18.8 15.6 18.7
Industrials
Construction and Materials – 1.7 – – – – – – – 2.8 – – 4.5 4.3 4.5
Industrial Engineering – – – – – 2.2 – – – 1.6 – – 3.8 2.2 3.5
Industrial Support Services 0.8 1.4 – – – – 1.6 – – – – – 3.8 1.3 3.6
Electronic and Electrical Equipment 2.9 – – – – – – – – – – – 2.9 3.7 4.4
Aerospace and Defense – – 1.9 – – – – – – – – – 1.9 3.0 2.3
General Industrials – 1.3 – – – – – – – – – – 1.3 2.2 1.3
Industrial Transportation – – – – – – – – – – – – – 2.6 –
3.7 4.4 1.9 – – 2.2 1.6 – – 4.4 – – 18.2 19.3 19.6
Consumer Discretionary
Personal Goods 11.0 – 0.9 – – – – – – – – – 11.9 6.2 12.5
Travel and Leisure 1.0 – – – – – – – – – 2.7 – 3.7 0.6 3.5
Automobiles and Parts – – – – – – – – – – – – – 2.7 0.5
Media – – – – – – – – – – – – – 1.1 –
Retailers – – – – – – – – – – – – – 1.0 –
Household Goods and Home
Construction – – – – – – – – – – – – – 0.3 –
Consumer Services – – – – – – – – – –
–
– – 0.1 –
12.0 – 0.9 – – – – – – – 2.7 – 15.6 12.0 16.5
Technology
Software and Computer Services 1.6 – 5.9 – – – – 2.3 – – – – 9.8 5.5 7.7
Technology Hardware and
Equipment – – – 5.8 – – – – – – – – 5.8 4.7 6.3
1.6 – 5.9 5.8 – – – 2.3 – – – – 15.6 10.2 14.0
Distribution of the Portfolio
as at 31 December 2024
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
France
Switzerland
Germany
Netherlands
Denmark
Finland
UK
Spain
Italy
Sweden
Other
Future
Total 2024
1
Index 2024
2
Total 2023
1,3
Consumer Staples
Food Producers – 5.9 – – – – – – – – – – 5.9 4.2 7.3
Beverages – – – – – – – – – – – – – 1.4 –
Personal Care, Drug and Grocery
Stores – – – – – – – – – – – – – 1.1 –
– 5.9 – – – – – – – – – – 5.9 6.7 7.3
Basic Materials
Chemicals – – 1.9 – – – – – – – 2.4 – 4.3 3.0 4.1
Industrial Metals and Mining – – – – – – – – – – – – – 0.6 –
Industrial Materials – – – – – – – – – – – – – 0.4 –
– – 1.9 – – – – – – – 2.4 – 4.3 4.0 4.1
Energy
Oil, Gas and Coal 4.0 – – – – – – – – – – – 4.0 2.9 4.3
Alternative Energy – – – – – – – – – – – – – 0.6 –
4.0 – – – – – – – – – – – 4.0 3.5 4.3
Utilities
Gas, Water and Multi-Utilities 1.5 – – – – – – – – – – – 1.5 1.3 –
Electricity – – – – – – – – – – – – – 2.7 2.2
1.5 – – – – – – – – – – – 1.5 4.0 2.2
Telecommunications
Telecommunications Service
Providers – – – – – – – – – – – – – 2.7 –
Telecommunications Equipment – – – – – – – – – – – – – 0.6 –
– – – – – – – – – – – – – 3.3 –
Real Estate
Real Estate Investment Trusts – – – – – – – – – – – – – 0.4 –
Real Estate Investment and Services – – – – – – – – – – – – – 0.7 –
– – – – – – – – – – – – – 1.1 –
Future – – – – – – – – – – – 3.5 3.5 – 4.1
Asset Exposure – 2024
1
31.5 20.1 13.6 7.1 5.5 4.4 4.6 4.1 2.4 5.9 8.6 3.5 111.3
Index – 2024
2
21.3 18.9 18.2 8.7 5.5 1.9 – 5.6 6.0 6.5 7.4 – 100.0
Asset Exposure – 2023
1,3
32.6 22.5 11.4 8.6 6.1 4.3 4.3 3.3 3.9 5.8 6.2 4.1 113.1
1 Asset Exposure is expressed as a percentage of Shareholders’ Funds.
2 FTSE World Europe ex UK Index (Benchmark Index).
3 Due to the Company’s future contract now being disclosed separately, the comparative information for 2023 has been restated to align with the current year sector
classifications.
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Annual Report 2024
Analysis of change in NAV total return for the year ended 31 December 2024 %
Impact of:
Index +8.5
Exchange Rate -5.5
Gearing +0.4
Stock Selection -2.2
Expenses -0.8
Cash +0.1
NAV total return for the year ended 31 December 2024 +0.5
Ten Highest Contributors to NAV total return (on a relative basis) %
3i Group +1.2
SAP +1.1
MTU Aero Engines +0.7
EssilorLuxottica +0.6
Intesa Sanpaolo +0.5
Lonza Group +0.4
Bankinter +0.4
KBC Groupe +0.3
Deutsche Börse Group +0.3
Hermès International +0.3
Ten Highest Detractors to NAV total return (on a relative basis) %
L’Oréal -0.8
Nestlé -0.8
Dassault Systèmes -0.5
Novo Nordisk -0.5
TotalEnergies -0.5
Alstom -0.5
LVMH Moët Hennessy -0.4
Edenred -0.4
Tecan Group -0.4
Sika -0.4
Source: Fidelity.
Attribution Analysis
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
The charts below show a breakdown of the underlying stocks in the Company’s portfolio using MCSI and Fidelity International’s own ESG
ratings. In the first chart, MSCI rates issuers on a AAA to CCC scale according to their exposure to industry specific ESG key issues and
their ability to manage those issues relative to peers. In the second chart, Fidelity’s analysts rate stocks in their coverage universe on a
five scale rating from A (best) to E (worst) and are based on the net asset value of holdings excluding cash, liquidity funds and
derivatives, and rebased to 100%. Fidelity’s proprietary sustainability ratings system leverages its internal research and interactions with
issuers. The ratings are designed to generate a forward-looking and holistic assessment of ESG risks and opportunities based on sector
specific performance indicators.
Fidelity ESG Ratings (%)
MSCI ESG Ratings (%)
Portfolio %
Index %
0
5
10
15
20
25
30
35
40
45
0
10
20
30
40
50
60
70
A
AAA AA A BBB BB B CCC Not
Rated
B C D E Not
Rated
Portfolio %
Index %
Sources: Fidelity International and MSCI ESG Research 31 December 2024. Portfolio = Fidelity European Trust PLC. Index = MSCI Europe ex UK.
ESG Ratings
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For the year ended 31December 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Assets
Gross Asset Exposure (£m)
1
1,739.2 1,796.0 1,542.9 1,638.2 1,364.3 1,221.6 1,052.1 1,166.0 901.5 781.7
Shareholders’ Funds (£m) 1,563.1 1,587.5 1,381.0 1,474.2 1,220.3 1,140.6 955.3 1,030.0 875.4 760.3
NAV per Ordinary Share (p)
2
382.44 388.39 337.87 358.68 296.57 277.19 231.77 248.08 210.75 182.57
Ordinary Share Price and Discount
Ordinary Share Price (p) 352.00 360.00 319.50 340.50 286.00 260.00 207.00 226.70 183.50 174.00
Discount to NAV (%)
2
8.0 7.3 5.4 5.1 3.6 6.2 10.7 8.6 12.9 4.7
Revenue and Costs
Revenue Return per Ordinary Share (p)
2
10.41 9.32 9.00 7.50 5.12 7.00 6.94 4.37 4.34 3.37
Dividends per Ordinary Share (p) 9.10 8.25 7.70 6.83 6.50 6.47 6.28
3
4.35 4.17 3.33
Ongoing Charges Ratio (Cost of running
the Company)
2
0.76 0.77 0.78 0.79 0.86 0.87 0.88 0.93 0.99 0.94
Gearing
Gross Gearing (%)
2, 4
11.3 13.1 11.7 11.1 11.8 7.1 10.1 13.2 3.0 2.8
Net Gearing (%)
2, 5
11.3 11.5 11.7 11.1 9.4 4.7 6.1 3.6 3.0 2.8
Performance Total Returns
NAV per Ordinary Share (%)
2
+0.5 +17.5 -3.6 +23.5 +9.7 +23.8 -4.8 +20.0 +17.6 +6.9
Ordinary Share Price (%)
2
-0.1 +15.3 -3.8 +21.7 +13.1 +30.6 -6.8 +26.2 +7.6 +9.2
Benchmark Index (%) +3.0 +15.7 -7.0 +17.4 +8.6 +20.4 -9.5 +17.5 +19.7 +5.3
1 The value of the portfolio exposed to market price movements.
2 Alternative Performance Measures.
3 Includes 1.79 pence from the additional revenue generated from the change in the allocation of management fees and finance costs.
4 Gross Asset Exposure in excess of Shareholders’ Funds.
5 Net Market Exposure in excess of Shareholders’ Funds.
Sources: Fidelity and Datastream.
Past performance is not a guide to future returns.
Ten Year Record
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Annual Report 2024
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Total return performance for ten years to 31 December 2024
+174.0%
+175.8%
+128.5%
Prices rebased to 100.
Sources: Fidelity and Datastream.
Ordinary share price
FTSE World Europe ex UK Index
NAV per ordinary share
60
80
100
120
140
160
180
200
220
240
260
280
300
320
Dec 23 Dec 24Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 21Dec 20
Dec 22
Summary of Performance Charts
NAV and ordinary share price for ten years to 31 December 2024
382.44p
352.00p
Sources: Fidelity and Datastream.
Ordinary share price
NAV per ordinary share
0
25
50
75
100
125
150
175
200
225
250
275
300
325
350
375
400
425
450
Dec 23 Dec 24Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 21Dec 20
Dec 22
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Total return performance relative to the Benchmark Index for ten years to 31 December 2024
+20.7%
+19.9%
Prices rebased to 100.
Sources: Fidelity and Datastream.
90
95
100
105
110
115
120
125
130
135
140
145
Dec 23 Dec 24Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 22Dec 21
Ordinary share price
FTSE World Europe ex UK Index
NAV per ordinary share
Ordinary share price discount to NAV for ten years to 31 December 2024 (%)
Sources: Fidelity.
-14
-12
-10
-8
-6
-4
-2
0
2024202320222021202020192018201720162015
-5.4
-8.0
- 4.7
-12.9
- 8.6
-10.7
- 6.2
- 3.6
-5.1
-7.3
Summary of Performance Charts continued
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Annual Report 2024
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Strategic Report
INVESTMENT APPROACH
The Directors have pleasure in presenting the Strategic Report of
the Company. The Chairman’s Statement and Portfolio Managers’
Review on pages 2 to 9 also form part of the Strategic Report.
Business and Status
The Company carries on business as an investment company
and has been accepted as an approved investment trust by
HM Revenue & Customs under Sections 1158 and 1159 of the
Corporation Tax Act 2010, subject to the Company continuing to
meet eligibility conditions. The Directors are of the opinion that
the Company has conducted its affairs in a manner which will
satisfy the conditions for continued approval.
The Company is registered as an investment company under
Section 833 of the Companies Act 2006 and its ordinary shares
are listed and traded on the London Stock Exchange. It is not a
close company and has no employees.
Objective
The Company’s objective is to achieve long-term growth in both
capital and income by predominantly investing in equities (and
their related securities) of continental European companies.
Strategy
In order to achieve the Company’s objective, it operates as an
investment company and has an actively managed portfolio of
investments, consisting predominantly of continental European
companies. As an investment company, it is able to gear the
portfolio and the Board takes the view that long-term returns for
shareholders can be enhanced by using gearing in a carefully
considered and monitored way.
As part of the strategy, the Board has delegated the
management of the portfolio and certain other services to the
Manager (FIL Investment Services (UK) Limited). The Portfolio
Managers’ aim is to achieve a total return on the Company’s
assets over the longer-term in excess of the equivalent return on
the FTSE World Europe ex UK Index, the Company’s Benchmark
Index. The stock selection approach adopted by the Portfolio
Managers is considered to be well suited to achieving this
objective. The Board recognises that investing in equities is a
long-term process and the Company’s returns will vary year to
year.
The Company’s objective, strategy and principal activity have
remained unchanged throughout the year ended 31 December
2024.
Investment Management Philosophy, Style and Process
The Portfolio Managers’ three principles for investing in equities
are:
• Bottom up – stock selection with a focus on dividend growth;
• Long-term – a long-term view improves performance and
reduces costs; and
• Cautious – a focus on managing downside risk creates a
strong foundation for long-term outperformance.
The Portfolio Managers’ key focus is on identifying attractively
valued companies which show good long-term structural growth
prospects and which they believe can grow their dividends over
the next few years, as they believe these are likely to outperform
over time.
In order to identify these companies, the Portfolio Managers look
for the following main characteristics:
• Positive fundamentals – structural growth, disciplined use of
capital, proven business models;
• Cash generation – often a good indication of future
dividend growth;
• Strong balance sheets – ensure ability to grow dividends is
not jeopardised; and
• Attractive valuations – good quality stocks at a reasonable
price.
The Portfolio Managers draw upon the extensive research
generated by Fidelity’s team of analysts when researching
companies. This first-hand research is fundamental to seeking
success stories of the future. A great deal of importance is placed
on attending company meetings. Being bottom-up stock pickers,
the Portfolio Managers aim to generate outperformance through
company selection, on a three to five year investment horizon,
rather than through sector or country positions.
Investment Policy
The Company invests predominantly in continental European
companies with a view to achieving long-term growth in both
capital and income for shareholders. The portfolio is selected
by the Investment Manager on the basis of its assessment of
the fundamental value available in individual situations and with
a typical focus on larger companies which show prospects for
sustainable long-term dividend growth. Whilst the Company’s
overall exposure to individual countries and industry sectors is
monitored, the portfolio is not restricted in terms of size, industry,
or geographical split, although certain investment restrictions
apply in an attempt to diversify risk.
Investment restrictions
• A minimum of 80 per cent of gross assets will be invested
in companies from countries which are included in the
Benchmark Index (the FTSE World Europe ex UK Index).
• A maximum of:
a) 20 per cent of gross assets may be invested in stocks
of European countries* which are not included in the
Company’s Benchmark Index. This will include investing in
UK companies, defined as companies in the FTSE All-Share
Index; and
b) 5 per cent of gross assets may be invested in stocks of non-
European countries where those stocks have some exposure
to, or connection with Europe. Any investments in this
category will count towards the 20 per cent maximum limit in
paragraph (a) above.
* European country for the purposes of this paragraph means a country included
within the FTSE All-World Europe Index and non-European is to be construed
accordingly.
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• A maximum of 10 per cent of the Company’s gross assets
may be invested in the aggregate of:
a) securities not listed on a recognised stock exchange; and
b) holdings in which the interest of the Company amounts to 20
per cent or more of the equity capital of any listed company.
• The Company will not invest more than 10 per cent of gross
assets in any one quoted company at the time of acquisition.
• A maximum of 5 per cent of the Company’s gross assets
may be held in unquoted securities in aggregate at any one
time.
• The maximum amount of cash or cash equivalents held
by the Company will be 25 per cent of the Company’s
total net assets, but this limit will not include any cash or
cash equivalent paid as collateral for unrealised losses on
derivatives. In practice the cash position will normally be
much lower.
• The Board reserves the right to lend stock and/or assets of
up to 10 per cent of the Company’s total net assets.
• The Board reserves the right to hedge the portfolio by way
of currency.
• A maximum of 10 per cent of the Company’s gross assets
may be invested in the securities of other investment
companies (including listed investment trusts).
Derivative instruments
The Company may utilise derivative instruments, including index-
linked notes, futures, contracts for difference (“CFDs”), covered
call options, put options and other equity-related derivative
instruments on a limited basis as a tool to meet the investment
objective of the Company. They are used principally in the
following ways:
• As an alternative form of gearing to bank loans. The
Company would enter into long CFDs which would achieve
an equivalent effect to buying an asset financed by bank
borrowing but often at lower financing costs.
• To hedge equity market risks where suitable protection can
be purchased to limit the downside of a falling market at a
reasonable cost.
• To enhance the investment returns by taking short exposures
on stocks that the Investment Manager considers to be over-
valued.
• To enhance returns through writing covered call options and
writing put options.
The Board has created strict policies and exposure limits and
sub-limits to manage derivatives. These limits and their impacts
are monitored by the Manager on a daily basis and reported
regularly to the Board. The limits are:
• The aggregate exposure of the Company to equities,
including as a result of borrowing and the use of derivatives,
but excluding hedging, will not exceed 130 per cent of total
net assets (a gearing level of 30 per cent) at the time at
which any derivative contract is entered into or a security
acquired.
• The aggregate exposure of the Company under short
derivatives, excluding hedges and covered call options, will
not exceed 10 per cent of total net assets at the time at
which any derivative contract is entered into.
• The aggregate exposure of the Company under covered
call options, being the notional exposure of the calls, will
not exceed 20 per cent of total net assets at the time at
which any derivative is entered into. The notional exposure
of covered call options is the number of contracts written
times the notional contract size times the market value of the
underlying share price.
The majority of the Company’s exposure to equities will be
through direct investment, not through derivatives. In addition,
the limits on exposure to individual companies and groups will
be calculated on the basis that the Company has acquired the
securities to which any derivative is providing exposure.
Gearing
The Company’s normal policy is to be geared in the belief that
long-term investment returns will exceed the costs of gearing.
This gearing is obtained through the use of CFDs and index
futures to obtain exposure to securities selected by the Investment
Manager. It can also be obtained through the use of borrowings.
The effect of gearing is to magnify the consequence of market
movements on the portfolio and if the portfolio value rises the
NAV will be positively impacted, but if it falls the NAV will be
adversely impacted. The Board is responsible for the order of
magnitude of gearing in the Company while the Investment
Manager decides gearing on a day-to-day basis within a range
set by the Board. Gearing is reviewed at each Board meeting.
Performance
The Company’s performance for the year ended 31 December
2024, including a summary of the year’s activities and indications
of trends and factors that may impact the future performance of
the Company are included in the Chairman’s Statement and the
Portfolio Managers’ Review on pages 2 to 9. The Portfolio Listing,
the Distribution of the Portfolio and the Attribution Analysis are on
pages 12 to 16, and the Ten Year Record and the Summary of
Performance Charts are set out on pages 18 to 20.
Results and Dividends
The Company’s results for the year ended 31 December 2024 are
set out in the Income Statement on page 53. The revenue return
was 10.41 pence and the capital loss was 7.78 pence, giving a
total return of 2.63 pence per ordinary share.
Under Section 1159 of the Corporation Tax Act 2010, the
Company is not able to retain more than 15% of its net income
in any reporting year to continue to qualify as an investment
company. The Directors recommend a final dividend of 5.50
pence per ordinary share for the year ended 31 December 2024
to be paid on 13 May 2025 to shareholders who appear on
the register as at the close of business on 28 March 2025 (ex-
dividend date 27 March 2025). Together with the interim dividend
of 3.60 pence per ordinary share paid on 25 October 2024, the
total dividends for the year are 9.10 pence per ordinary share.
Strategic Report continued
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Annual Report 2024
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Key Performance Indicators
The Board’s intention is for the NAV and share price to
outperform the Benchmark Index and that the discount should
be maintained in single digits in normal market conditions. It
regularly considers the costs of running the Company to ensure
they are reasonable and competitive. The key performance
indicators (“KPIs”) used to determine the performance of the
Company, and which are comparable to those reported by other
investment companies, are set out in the table below.
Year ended
31 December
2024
%
Year ended
31 December
2023
%
NAV per Ordinary Share total
return
1
+0.5 +17.5
Ordinary Share Price total return
1
-0.1 +15.3
FTSE World Europe ex UK Index
total return (Benchmark Index) +3.0 +15.7
Discount to NAV
1
8.0 7.3
Ongoing Charges Ratio
1
0.76 0.77
1 Alternative Performance Measures.
Sources: Fidelity and Datastream.
In addition to the KPIs set out in the table above, the Board also
monitors the factors contributing to investment results, as set out
in the Attribution Analysis table on page 16 and also against its
peer group of investment companies. Long-term performance is
also monitored and the Ten Year Record and the Summary of
Performance Charts on pages 18 to 20 show this information.
RISK FRAMEWORK
Principal Risks and Uncertainties and Risk Management
As required by provisions 28 and 29 of the 2018 UK Corporate
Governance Code, the Board has a robust ongoing process
for identifying, evaluating and managing the principal risks
and uncertainties faced by the Company, including those that
could threaten its business model, future performance, solvency
or liquidity. The Board, with the assistance of the Alternative
Investment Fund Manager (FIL Investment Services (UK) Limited/
the “Manager”), has developed a risk matrix which, as part of the
risk management and internal controls process, identifies the key
existing and emerging risks and uncertainties that the Company
faces.
Emerging Risks
The Audit Committee continues to identify any new emerging risks
and take any action necessary to mitigate their potential impact.
The risks identified are placed on the Company’s risk matrix and
graded appropriately. This process, together with the policies
and procedures for the mitigation of existing and emerging risks,
is updated and reviewed regularly in the form of comprehensive
reports by the Audit Committee. The Board determines the nature
and extent of any risks it is willing to take in order to achieve the
Company’s strategic objectives.
Climate change, which refers to a large scale shift in the planet’s
weather patterns and average temperatures, continues to be a key
emerging as well as a principal risk confronting asset managers
and their investors. Globally, climate change effects are already
being experienced in the form of changing weather patterns.
Extreme weather events can potentially impact the operations of
investee companies, their supply chains and their customers. The
Board notes that the Manager incorporates ESG considerations,
including climate change, into the Company’s investment process.
The Board will continue to monitor how this may impact the
Company as a risk to investment valuations and potentially affect
shareholder returns.
The Board, together with the Manager, is also monitoring the
emerging risks posed by the rapid advancement of artificial
intelligence (“AI”) and technology and how it may threaten the
Company’s activities and its potential impact on the portfolio and
investee companies. AI can provide asset managers powerful
tools, such as enhancing data analysis risk management, trading
strategies, operational efficiency and client servicing, all of
which can lead to better investment outcomes and more efficient
operations. However, with these advances in computing power
that will impact society, there are risks from its increasing use and
manipulation with the potential to harm, including a heightened
threat to cybersecurity.
Other emerging risks may continue to evolve from unforeseen
geopolitical and economic events.
The Manager also has responsibility for risk management for
the Company. It works with the Board to identify and manage
the principal and emerging risks and uncertainties and to ensure
that the Board can continue to meet its UK corporate governance
obligations.
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The Board considers the risks listed below and on pages 25 to 27 as the principal risks and uncertainties faced by the Company.
Principal Risks Description and Risk Mitigation
Geopolitical,
Economic and
Market Risks
The Company and its assets may be impacted by geopolitical, economic and market related risks,
in particular concerns over global economic growth, inflation and financial distress.
The Company is exposed to a number of geopolitical risks. The fast-changing global geopolitical
landscape is largely shaped by the ongoing armed conflicts effects, deglobalisation trends
and significant supply disruption, as well as concerns around global growth and uncertainties
on effects of changes in monetary policies, recession amid inflationary pressures and financial
distress. Russia and the Middle East are both significant net exporters of oil, natural gas and a
variety of soft commodities and supply limitations have fuelled global inflation and economic
instability, specifically within Western nations. Broader geopolitical themes include the US-China
trade war, the South China sea dispute affecting shipping routes, the implications of China-Taiwan
relations and escalation of North and South Korea tensions.
European economic growth remains under pressure: anaemic credit growth and depressed
confidence will likely push the European Central Bank to cut rates more aggressively in 2025.
A weaker euro remains the key offset to tariff risks. Additionally, downside risks are further
accumulating as President Trump links the US’s geo-economic aims with tariff threats. Significant
increases in domestic European defence spending would provide a catalyst for a cyclical upswing,
but the shape and timing are uncertain.
The Company may be affected by market and economic risks. The principal market related risks
are market downturn, interest rate movements, inflation and market shocks, such as volatility
from the war in Ukraine and conflict in the Middle East. The Company may also be impacted
by concerns over global economic growth and major political events affecting markets and
economies and the consequences of this. Although inflation is starting to stabilise across most
economies, risks remain driven by a combination of global labour shortages in some sectors and
supply chain shortages, including energy and food security. Inflation and economic instability are
leading to a prolonged cost-of-living crisis and potentially impacting investors’ risk appetite.
The Company’s portfolio is made up mainly of listed securities. The Portfolio Managers success
or failure to protect and increase the Company’s value against the above background is core
to the Company’s continued success. The investment philosophy of stock-picking and investing in
attractively valued companies should outperform the Benchmark Index over time.
The risk from the likely effects of unforeseen economic and market events is somewhat mitigated
by the Company’s investment trust structure which means no forced sales need to take place to
deal with any redemptions. Therefore, investments can be held over a longer time horizon.
The Board reviews geopolitical, economic and market risks and legislative changes at each Board
meeting. The Portfolio Managers provide an investment review at each meeting which includes a
review of the economic and political environment and any risks and challenges faced by the Company.
Risks to which the Company is exposed to in the market risk category are included in Note 17 in
theFinancial Statements on pages 67 to 72 together with summaries of the policies for managing
theserisks.
Strategic Report continued
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Annual Report 2024
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Principal Risks Description and Risk Mitigation
Investment
Performance Risk
(including the use
of derivatives and
gearing)
The achievement of the Company’s investment performance objective relative to the market
requires the taking of risk such as investment strategy, asset allocation and stock selection, and
may lead to NAV and share price underperformance compared to the Benchmark Index and/
or peer group companies. The Board relies on the Portfolio Managers’ skills and judgement to
make investment decisions based on research and analysis of individual stocks and sectors.
The Board reviews the performance of the asset value of the portfolio against the Company’s
Benchmark Index and its competitors and also considers the outlook for the market with
the Portfolio Managers at each Board meeting. The emphasis is on long-term investment
performance as there is a risk for the Company of volatility of performance in the shorter-term.
Derivative instruments are used to protect and enhance investment conviction and returns.
There is a risk that the use of derivatives may lead to higher volatility in the NAV and the
share price due to leverage effect than might otherwise be the case. The Board has put in
place policies and limits to control the Company’s use of derivatives and exposures. These
are monitored on a daily basis by the Manager’s Compliance team and regular reports are
provided to the Board. Further detail on derivative instruments risk is included in Note 17 in the
Financial Statements on page 70.
The Company gears through the use of long CFDs which provide greater flexibility and are
generally cheaper than bank loans as a form of financing. The principal risk is that the Portfolio
Managers fail to use gearing effectively, resulting in a failure to outperform in a rising market
or increasing underperformance in a falling market. The Board regularly considers the level of
gearing and gearing risk and sets limits within which the Manager must operate.
Legislation, Taxation
and Regulatory Risks
The Company may be impacted by changes in legislation, taxation, regulation or other external
influence that require changes to the nature of the Company’s business.
A breach of Section 1158 of the Corporation Tax Act 2010 by the Company could lead to a loss
of investment trust status, resulting in the Company being subject to tax on capital gains.
In recent months, there have been increased concerns around investment cost disclosures and
their impact on the industry. However, it should be noted that the Government and regulator
have announced a temporary exemption for investment companies from the EU cost disclosure
requirements.
Regulatory changes for investment companies are monitored regularly by the Board and
managed through active engagement with regulators and trade bodies by the Manager and
also by the AIC.
Marketplace and
Competition Risks
The environment in which the Company operates continues to undergo change, which may
affect the Company’s ability to grow and maintain its business. This change includes the
increasing presence of alternative investment offerings, as well as industry consolidation, which
could influence the demand for investment trusts.
The Board, the Manager, and the Company’s Broker closely monitor industry activity and
the peer group and actively manage supply and demand through its discount polices and
mechanisms. In addition, an annual strategy review is undertaken by the Board to ensure that
the Company continues to offer a relevant product to shareholders.
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Principal Risks Description and Risk Mitigation
Cybercrime and
Information Security
Risks
The operational risk and business impact from heightened external levels of cybercrime and
the risk of data loss is significant. Cybercrime threats evolve rapidly and consequently the risk is
regularly re-assessed and the Board receives regular updates from the Manager in respect of
the type and possible scale of cyberattacks. The Manager’s technology and risk management
teams have developed robust risk frameworks and implemented a number of initiatives and
controls in order to provide enhanced mitigating protection to this ever-increasing threat, and
also to address the potential risks of artificial intelligence (AI). The risks are regularly re-
assessed by Fidelity’s information security teams and risk frameworks are continually enhanced
with the implementation of additional tools and processes, including improvements to existing
ones. Fidelity has dedicated cybersecurity and technology risk teams which provide continuous
oversight, preventative and detection controls as well as awareness updates and best practice
guidance.
Risks also remain due to military conflicts and geopolitical tensions including the war in
Ukraine and conflict in the Middle East and employees working from home. These primarily
relate to phishing, ransomware, remote access threats, extortion and denial of services attacks,
threats from highly organised criminal networks and sophisticated ransomware operators. The
Manager has dedicated prevent, detect and respond resources specifically to monitor the
cyber threats associated within the workplace and there are a number of mitigating actions
in place, including control strengthening, geo-blocking and phishing mitigants, combined with
enhanced resilience and recovery options.
The Company’s third-party service providers are also subject to regular oversight and provide
assurances and have similar control measures in place to detect and respond to cyber threats
and activity.
Business Continuity
Risk
There continues to be increased focus from financial services regulators around the world on
the contingency plans of regulated financial firms. The top risks globally are cybersecurity,
geopolitical events, outages, fire events and natural disasters. There are also ongoing risks from
the war in Ukraine and conflict in the Middle East, specifically regarding cyberattacks and the
potential loss of power and/or broadband services.
The Manager continues to take all necessary and reasonable steps to assure operational
resilience and to meet its regulatory obligations, assess its ability to continue operating and the
steps it needs to take to support its clients, including the Board, and has an appropriate control
environment in place. The Manager has provided the Board with assurance that the Company
has appropriate operational resilience and business continuity plans and the provision of
services has continued to be supplied without interruption. In addition, hybrid working patterns
allow for greater flexibility in the event of another pandemic or similar event.
The Company relies on a number of third-party service providers, principally the Registrar,
Custodian and Depositary. They are all subject to a risk-based programme of risk oversight and
internal audits by the Manager and their own internal controls reports are received by the Board
on an annual basis and any concerns are investigated. The third-party service providers have
also confirmed the implementation of appropriate measures to ensure no business disruption.
Risks associated with these services are generally rated as low, but the financial consequences
could be serious, including reputational damage to the Company. These are mitigated through
operational resilience frameworks.
Strategic Report continued
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Principal Risks Description and Risk Mitigation
Key Person and
Operational Support
Risks
The loss of the Portfolio Manager or key individuals could lead to potential performance,
operational or regulatory issues.
The Portfolio Manager’s style is intrinsically linked with the Company’s investment philosophy
and strategy and, therefore, the Company has a key person dependency on him. Fidelity
has succession plans in place for its portfolio managers which have been discussed with the
Board and provides some assurance in this regard. The Co-Portfolio Manager has been in
place since 1 September 2020 and he works closely alongside the Portfolio Manager and has
extensive experience in European markets and companies and shares a common investment
approach and complementary investment experience with the Portfolio Manager. This helps
strengthen the investment process by introducing greater challenge and also increases the
ability to be able to meet more companies.
The Manager identifies key dependencies which are then addressed through succession plans,
particularly for portfolio managers.
Discount Control Risk
Owing to the nature of investment companies, the price of the Company’s shares and its
discount to NAV are factors which are not totally within the Company’s control. The Board has
an active discount management policy in place, the primary purpose of which is to reduce
discount volatility and maintain the Company’s discount in single digits in normal market
conditions. Some short-term influence over the discount may be exercised by the use of share
repurchases at acceptable prices and within the parameters set by the Board. The demand for
shares can be influenced through good performance and an active investor relations program.
The Company’s share price, NAV and discount volatility are monitored daily by the Manager
and the Company’s Broker and considered by the Board at each of its meetings.
The investment company sector has suffered from significant discounts for an extended period
and this has allowed for some activist managers to take a more aggressive approach. The
Board is aware of these risks and continue to actively monitor the Company’s discount and will
take action within the guidelines set.
Environmental, Social
and Governance
(“ESG”) Risk
There is a risk that the value of the assets of the Company is affected by ESG related risks,
including climate change risk, such as the risk of extreme weather events that may impact global
supply chains for companies and customers. ESG risks include investor expectations and how the
Company is positioned from a marketing perspective and whether it is compliant with its ESG
disclosure requirements. Whilst Fidelity considers ESG factors in its investment decision-making
process, the Company does not carry the label. However, ESG continues to be a risk confronting
asset managers and investors. The Board monitors how this may potentially impact the Company
on investment valuations and shareholders returns.
ESG integration is carried out at the fundamental research analyst level within its investment
teams, primarily through Fidelity’s Proprietary Sustainability Rating which is designed to generate
a forward-looking and holistic assessment of a company’s ESG risks and opportunities based on
sector-specific key performance indicators. The Portfolio Manager considers the effects of ESG
when making investment decisions. ESG ratings of the companies within the Company’s portfolio
compared to MSCI ratings are provided on page 17.
The Company has a full risk register which includes less material risks and the Audit Committee, on behalf of the Board, reviews this at
least annually.
Continuation Vote
A continuation vote takes place every two years. There is a risk
that shareholders do not vote in favour of the continuation of the
Company during periods when performance of the Company’s
NAV and its share price is poor. The last continuation vote was at
the AGM held on 10 May 2023 and 99.86% of the votes cast by
shareholders were in favour of the continuation of the Company.
The next continuation vote will take place at this year’s AGM on
8May 2025 and the Directors expect the vote to be passed.
Viability Statement
In accordance with provision 31 of the 2018 UK Corporate
Governance Code, the Directors have assessed the prospects of
the Company over a longer period than the twelve month period
required by the “Going Concern” basis. The Company is an
investment trust with the objective of achieving long-term growth
in both capital and income. The Board considers long-term to be
at least five years, and accordingly, the Directors believe that five
years is an appropriate investment horizon to assess the viability of
the Company, although the life of the Company is not intended to
be limited to this or any other period.
Job No: 53875 Proof Event: 14 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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In making an assessment on the viability of the Company, the
Board has considered the following:
• The ongoing relevance of the investment objective in
prevailing market conditions;
• The Company’s level of gearing;
• The Company’s NAV and share price performance compared
to its Benchmark Index;
• The principal and emerging risks and uncertainties facing the
Company and their potential impact, as set out on pages 23
to 27;
• The likely future demand for the Company’s shares;
• The Company’s share price discount to the NAV and the
Board’s discount management policy;
• The liquidity of the Company’s portfolio;
• The level of income generated by the Company; and
• Future income and expenditure forecasts.
The Company’s performance for the five year reporting period to
31 December 2024 was well ahead of the Benchmark Index, with a
NAV total return of +54.2% and an ordinary share price total return
of +52.6% compared to the Benchmark Index total return of +41.4%.
The Board regularly reviews the investment policy and considers
whether it remains appropriate. The Board has concluded that
there is a reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they fall due over
the next five years based on the following considerations:
• The Investment Manager’s compliance with the Company’s
investment objective and policy, its investment strategy and
asset allocation;
• The portfolio mainly comprises readily realisable securities
which can be sold to meet funding requirements if necessary;
• The Board’s discount management policy; and
• The ongoing processes for monitoring operating costs and
income which are considered to be reasonable in comparison
to the Company’s total assets.
In preparing the Financial Statements, the Directors have
considered the continued impact of climate change and potential
emerging risks from the use of artificial intelligence as detailed on
page 23. The Board has also considered the impact of regulatory
changes, unforeseen market events, geopolitical issues and the
ongoing global implications of the war in Ukraine and the conflict
in the Middle East and how this may affect the Company.
In addition, the Directors’ assessment of the Company’s ability to
operate in the foreseeable future is included in the Going Concern
Statement which is included in the Directors’ Report on page 32.
PROMOTING THE SUCCESS OF THE COMPANY
Under Section 172(1) of the Companies Act 2006, the Directors
of a company must act in a way they consider, in good faith,
would be most likely to promote the success of the Company
for the benefit of its members as a whole, and in doing so have
regard (amongst other matters) to the likely consequences of any
decision in the long-term; the need to foster relationships with the
Company’s suppliers, customers and others; the impact of the
Company’s operations on the community and the environment;
the desirability of the Company maintaining a reputation for high
standards of business conduct; and the need to act fairly as
between members of the Company.
As an externally managed investment company, the Company has
no employees or physical assets, and a number of the Company’s
functions are outsourced to third parties. The key outsourced
function is the provision of investment management services by
the Manager, but other professional service providers support the
Company by providing administration, custodial, banking and audit
services. The Board considers the Company’s key stakeholders
to be the existing and potential shareholders, the externally
appointed Manager (FIL Investment Services (UK) Limited)
and other third-party professional service providers. The Board
considers that the interest of these stakeholders is aligned with
the Company’s objective of delivering long-term capital growth to
investors, in line with the Company’s stated objective and strategy,
while providing the highest standards of legal, regulatory and
commercial conduct.
The Board, with the Portfolio Managers, sets the overall investment
strategy and reviews this at an annual strategy day which is
separate from the regular cycle of board meetings. In order to
ensure good governance of the Company, the Board has set
various limits on the investments in the portfolio, whether in the
maximum size of individual holdings, the use of derivatives, the
level of gearing and others. These limits and guidelines are
regularly monitored and reviewed and are set out on pages 21
and 22.
The Board receives regular reports from the Company’s Broker
which covers market activity and how the Company compares with
peers in the AIC Europe and European Smaller Companies sectors.
The Board places great importance on communication with
shareholders. The Annual General Meeting provides the key
forum for the Board and the Portfolio Managers to present to the
shareholders on the Company’s performance and future plans
and the Board encourages all shareholders to attend in person
or virtually and raise any questions or concerns. The Chairman
and other Board members are available to meet shareholders
as appropriate. Shareholders may also communicate with Board
members at any time by writing to them at the Company’s
registered office at FIL Investments International, Beech Gate,
Millfield Lane, Tadworth, Surrey KT20 6RP or via the Secretary at
the same address or by email at investmenttrusts@fil.com.
The Portfolio Managers meet with major shareholders, potential
investors, stock market analysts, journalists and other commentators
throughout the year. These communication opportunities help
inform the Board in considering how best to promote the success
of the company over the long-term.
Strategic Report continued
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
The Board seeks to engage with the Manager and other service
providers and advisers in a constructive and collaborative way,
promoting a culture of strong governance, while encouraging
open and constructive debate, in order to ensure appropriate and
regular challenge and evaluation. This aims to enhance service
levels and strengthen relationships with service providers, with
a view to ensuring shareholders’ interests are best served by
maintaining the highest standards of commercial conduct while
keeping cost levels competitive.
Whilst the Company’s direct operations are limited, the Board
recognises the importance of considering the impact of the
Company’s investment strategy on the wider community and
environment. The Board believes that a proper consideration of
Environmental, Social and Governance (ESG) issues aligns with the
Company’s investment objective to deliver long-term growth in both
capital and income.
In addition to ensuring that the Company’s investment objective
was being pursued, key decisions and actions taken by the Board
during the reporting year, and up to the date of this report, have
included:
• As part of the Board’s succession plan, carrying out a
recruitment process to replace Vivian Bazalgette as non-
executive Director and Chairman of the Board who having
completed nine years on the Board on 1 December 2024
will step down at the conclusion of the AGM on 8 May 2025.
Davina Walter will replace him as non-executive Director and
Chairman of the Board;
• The decision to pay an interim dividend of 3.60 pence
per ordinary share and a final dividend of 5.50 pence per
ordinary share (a total of 9.10 pence per ordinary share), to
maintain the Board’s policy to pay progressive dividends in
normal circumstances. The Company has paid an increased
dividend for 14 years in a row;
• Meetings by the Chairman with some of the Company’s key
shareholders during the reporting year;
• The decision once again to hold a hybrid AGM in 2025
in order to make the AGM more accessible to those
shareholders who are unable to or prefer not to attend in
person; and
• The decision to update the Company’s Articles of Association,
subject to shareholder approval at the AGM on 8 May 2025.
Board Diversity
The Board’s overriding intention is to ensure that it is made up
of the best combination of people in order to achieve long-term
capital growth for the Company’s shareholders from an actively
managed portfolio of investments. To this effect, the Board, as part
of its succession plan, will continue to appoint individuals who,
together as a Board, will aim to ensure the continued optimal
promotion of the Company in the marketplace. Due regard will be
given to the benefit of diversity on the Board, including gender and
ethnicity.
The Board has taken into consideration the FCA’s UK Listing Rules
requirements (UKLR 6.6.6(9), (10) and (11)) regarding the targets
on board diversity that:
• at least 40% of individuals on the Board are women;
• at least one senior Board position (chairman, chief executive
officer (“CEO”), senior independent director or chief financial
officer (“CFO”)) is held by a woman; and
• at least one board member should be from a non-white ethnic
background, as defined by the Office of National Statistics
criteria.
The Board considers that as an externally managed investment
trust, with no CEO or CFO, the Chairman of the Company, the
Senior Independent Director and the Chair of the Audit Committee
are senior positions.
As required by the FCA’s UK Listing Rules, the Company’s reporting
against these targets is set out in the tables below. The data was
collected on a self-identifying basis. As at 31 December 2024 and
up to the date of this report, the target of 40% of women on the
Board, the target of at least one senior Board position held by a
woman and for at least one individual to be from a minority ethnic
background have been met.
Gender Reporting as at 31 December 2024
Number
of Board
Members
Percentage of
the Board
Number of Senior
Board Positions
(Chair, Senior
Independent
Director and
Audit Committee
Chair)
Men 3 50% 2
Women 3 50% 1
Ethnic Background Reporting as at 31 December 2024
Number
of Board
Members
Percentage of
the Board
Number of Senior
Board Positions
(Chair, Senior
Independent
Director and
Audit Committee
Chair)
White British
or other White
(including minority
white groups) 5 83% 3
Asian British 1 17% 0
Job No: 53875 Proof Event: 14 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
Customer: Fidelity Project Title: FET Annual Report 2024 T: 0207 055 6500 F: 020 7055 6600
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CORPORATE AND SOCIAL RESPONSIBILITY
Environmental, Social and Governance (“ESG”) in the
Investment Process
The Board has contracted with the Manager to provide the
Company with investment management and administrative
services. The Board believes that ESG considerations are an
important input into the assessment of the value of the Company’s
investments. The investment universe is undergoing significant
structural change and is likely to be impacted by increasing
regulation as a result of climate change and other social and
governance factors. The Board is committed to reviewing how
theManager applies ESG factors in its investment process.
The Fidelity group of companies (including the Manager and
Investment Manager) sets out its commitment to responsible
investing, and provides a copy of its detailed Responsible
Investingat www.fidelity.co.uk/sustainable/sustainability-at-
fidelity.
Socially Responsible Investment
The Manager’s primary objective is to produce superior financial
returns for the Company’s shareholders. It believes that high
standards of corporate social responsibility (CSR) make good
business sense and have the potential to protect and enhance
investment returns.
Corporate Engagement
The Board believes that the Company should, where appropriate,
take an active interest in the affairs of the companies in which it
invests and that it should exercise its voting rights at their general
meetings. It delegates the responsibility for corporate engagement
and shareholder voting to the Manager who updates the Board on
issues and activities. These activities are reviewed regularly by the
Manager’s stewardship team.
Streamlined Energy and Carbon Reporting (SECR)
As an investment company with all its activities outsourced to
third parties, the Company’s own direct environmental impact is
minimal. The Company has no premises, consumes no electricity,
gas or diesel fuel and consequently does not have a measurable
carbon footprint. The Company is categorised as a low energy
user (less than 40MWH) under the Streamlined Energy & Carbon
Reporting regulations and therefore is not required to disclose any
energy and carbon information in this Annual Report.
Task Force on Climate-Related Financial Disclosures (TCFD)
The Managers’ product level disclosure consistent with the Task
Force on Climate-related Financial Disclosures (TCFD) can be
found on the Company’s pages of the Manager’s website at
www.fidelity.co.uk/europe.
FUTURE DEVELOPMENTS
Some trends likely to affect the Company in the future are also
common to many investment companies together with the impact
of regulatory change and emerging risks. The factors likely to affect
the Company’s future development, performance and position are
set out in the Chairman’s Statement and the Portfolio Managers’
Review on pages 2 to 9.
By Order of the Board
FIL Investments International
Secretary
19 March 2025
Strategic Report continued
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INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Board of Directors
Committee membership key
A
Audit
M
Management Engagement
A
Audit Committee Chair
M
Management Engagement Committee Chairman
Vivian Bazalgette
Chairman (since 12 May 2016)
Appointed 1 December 2015
M
Vivian Bazalgette is a Trustee of St. Christopher’s Hospice. He was
previously Chief Investment Officer at M&G PLC. He was also a non-
executive Director of St James’s Place PLC, including Chairman of its
Investment Committee, Perpetual Income and Growth Investment Trust
PLC, Henderson High Income Trust PLC and Brunner Investment Trust
PLC. He was an Adviser to the BAE Systems Pension Fund.
Fleur Meijs
Chair of the Audit Committee
(since 14 May 2018)
Appointed 1 September 2017
A
M
Fleur Meijs is a non-executive Director of Ruffer LLP and she also serves
as Audit Committee Chair. She is a Director of Bridge to the Future,
the endowment fund for UWC (United World College) Mostar and
UWC Mostar and a representative of the Chairs of the Schools on the
International Board of UWC International. She is a Chartered Accountant
and was a Financial Services Partner at PricewaterhouseCoopers LLP
until May 2016. She was also a member of the Dutch Parliamentary
committee in 2013 for the structure of banks in the Netherlands.
Milyae Park
Director
Appointed 1 January 2022
A
M
Milyae Park is a non-executive Director of Alliance Witan PLC, Faber
and Faber Limited and THG PLC. She is a past Board Member of the
London Museum and former Chair of the London Museum Trading Ltd
Board that governs the Museum’s commercial activities. She began her
career as a qualified accountant in the US for PwC and in investment
banking at Goldman Sachs. In her subsequent executive career,
she has held senior positions at Accenture, Tesco PLC and Marks &
Spencer Group plc. She also holds an MBA from The Wharton School.
Sir Ivan Rogers
Director
Appointed 1 January 2020
A
M
Sir Ivan Rogers is an Advisory Board Member of the Official Monetary
and Financial Institutions Forum and of Market News International.
He is Chairman of the High Level Group on Neighbourhood
Interdependencies, a Member of the European Council for Foreign
Relations, a Consultant of the Bertelsmann Foundation and a Senior
Advisor at Fordham Global Foresight. He is a former British civil
servant, formerly the Permanent Representative of the UK to the
European Union for over three years until the beginning of 2017. Prior
to this, he was Principal Private Secretary to one British prime minister
and head of the Europe and Global Issues Secretariat for another. He
was twice the UK’s G7/G8 Sherpa and the EU and G20 Sherpa. The
majority of his career was working with the UK government and EU
institutions. He also spent five years in the private sector holding senior
public sector banking roles for Citigroup UK and Barclays Capital.
Davina Walter
Director
Appointed 1 November 2024
A
M
Davina Walter is Chairman of abrdn Diversified Income and Growth
plc and is a non-executive Director of Miton UK Microcap Trust plc. She
was previously Chairman of JPMorgan US Smaller Companies Trust
plc, Chairman of CT Property Trust plc and a non-executive Director
of JPMorgan Elect plc. She has extensive investment management
experience, latterly as a Managing Director at Deutsche Asset
Management. She also worked at Henderson Global and was head of
US research at Cazenove & Co.
Paul Yates
Senior Independent Director
(since 10 May 2022)
Appointed 6 March 2017
A
M
Paul Yates is Chairman of the Advisory Board of 33 St James’s Limited
and is a non-executive Director of Capital Gearing Trust P.l.c. He was
previously a non-executive Director of Witan Investment Trust plc,
Aberdeen Diversified Income and Growth Trust plc and The Merchants
Trust plc. He has had an extensive career in investment management
and was CEO of UBS Global Asset Management (UK) Limited and
held a number of global roles at UBS prior to his retirement.
All Directors are non-executive Directors and all are independent.
Job No: 53875 Proof Event: 14 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Directors’ Report
The Directors have pleasure in presenting their report together
with the audited Financial Statements of the Company for the
year ended 31 December 2024.
The Company was incorporated in England and Wales as a
public limited company on 16 August 1991 under the registered
number 2638812 and was launched as an investment trust on
5 November 1991.
Management Company
FIL Investment Services (UK) Limited (“FISL”) is the Company’s
appointed Alternative Investment Fund Manager (the
“AIFM”/”Manager”). FISL, as the Manager, has delegated the
portfolio management of assets and the role of the company
secretary to FIL Investments International.
The Alternative Investment Fund Management and Secretarial
Services Agreement (the “Management Agreement”) will
continue unless and until terminated by either party giving to
the other not less than six months’ notice in writing. However,
it may be terminated without compensation if the Company is
liquidated, pursuant to the procedures laid down in the Articles
of Association of the Company. The Management Agreement
may also be terminated forthwith as a result of a material
breach of the Management Agreement or on the insolvency of
the Manager or the Company. In addition, the Company may
terminate the Management Agreement by sixty days’ notice if the
Manager ceases to be a subsidiary of FIL Limited.
FIL Limited has no beneficial interest in the shares of the
Company (2023: same).
The Board reviews the Management Agreement at least annually
and details are included in the Corporate Governance Statement
on page 38.
Management Fee
Since 1 April 2021, the Company’s management fee is on a
tiered basis of 0.85 per cent on the first £400 million of the
Company’s net assets reducing to 0.65 per cent of net assets
over £400 million.
Fees for the reporting year were £11,512,000 (2023: £10,502,000)
and are disclosed in Note 4 on page 59.
The Board
All Directors served on the Board throughout the year ended
31 December 2024 with the exception of Davina Walter who
joined the Board on 1 November 2024. A brief description of all
serving Directors as at the date of this Annual Report is shown on
page 31 and indicates their qualifications for Board membership.
Directors’ and Officers’ Liability Insurance
In addition to the benefits under the Manager’s global Directors’
and Officers’ liability insurance arrangements, the Company
maintains additional insurance cover for its Directors under its
own policy as permitted by the Companies Act 2006.
Professional Negligence Liability Risks
The requirement to cover potential liability risks arising from
professional negligence is covered by the Manager’s own funds.
Sufficient capital above the regulatory limit is held which is
monitored by the board of the Manager.
Going Concern Statement
The Directors have considered the Company’s investment
objective, risk management policies, liquidity risk, credit risk,
capital management policies and procedures, the nature of
its portfolio and its expenditure and cash flow projections. The
Directors, having considered the liquidity of the Company’s
portfolio of investments (being mainly securities which are readily
realisable) and the projected income and expenditure, are
satisfied that the Company is financially sound and has adequate
resources to meet all of its liabilities and ongoing expenses and
continue in operational existence for the foreseeable future. The
Board has, therefore, concluded that the Company has adequate
resources to continue to adopt the going concern basis for the
period to 31 March 2026 which is at least twelve months from
the date of approval of the Financial Statements. This conclusion
also takes into account the Board’s assessment of the ongoing
risks from the war in Ukraine, the Middle East conflict, significant
market and geopolitical events and regulatory changes on the
Company’s performance, prospects and operations.
Accordingly, the Financial Statements of the Company have been
prepared on a going concern basis.
The prospects of the Company over a period longer than twelve
months can be found in the Viability Statement on pages 27 and
28.
The Board has also considered the upcoming continuation vote at
the AGM on 8 May 2025 and are not aware of any circumstances
that would result in the continuation vote not being passed.
Auditors’ Appointment
A resolution to reappoint Ernst & Young LLP as Auditor to the
Company will be proposed at the AGM on 8 May 2025.
Disclosure of Information to the Company’s Auditor
As required by Section 418 of the Companies Act 2006, each
Director in office as at the date of this Annual Report confirms that:
a) so far as each Director is aware, there is no relevant audit
information of which the Company’s Auditor is unaware; and
b) each Director has taken all the steps that ought to have
been taken as a Director to make himself/herself aware of
any audit information, and to establish that the Company’s
Auditor is aware of that information.
Corporate Governance
The Corporate Governance Statement on pages 36 to 39 forms
part of this report.
Job No: 53875 Proof Event: 14 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
Customer: Fidelity Project Title: FET Annual Report 2024 T: 0207 055 6500 F: 020 7055 6600
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INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Registrar, Custodian and Depositary Arrangements
The Company has appointed MUFG Corporate Markets (name
changed from Link Group in January 2025) as its Registrar to
manage the Company’s share register, JPMorgan Chase Bank
as its Custodian, which is primarily responsible for safeguarding
the Company’s assets, and J.P. Morgan Europe Limited as its
Depositary, which is primarily responsible for oversight of the
custody of investment funds and the protection of investors’
interests. Fees paid to these service providers are disclosed in
Note 5 on page 60.
Share Capital
The Company’s share capital comprises ordinary shares of 2.5
pence each which are fully listed on the London Stock Exchange.
As at 31 December 2024, the issued share capital of the
Company was 416,447,910 ordinary shares (2023: 416,447,910)
of which 7,717,387 shares (2023: 7,717,387) are held in Treasury.
Shares in Treasury do not have voting rights, therefore the total
number of shares with voting rights was 408,730,523 (2023:
408,730,523).
Premium/Discount Management: Enhancing Shareholder
Value
The Board recognises the importance of the relationship between
the Company’s share price and the NAV per share and monitors
this closely. It seeks authority from shareholders each year to
issue shares at NAV or at a premium to NAV or to repurchase
shares at a discount to the NAV, either for cancellation or holding
in Treasury. The Board will exercise these authorities if deemed
to be in the best interests of shareholders at the time. Details of
the Board’s discount management policy can be found in the
Chairman’s Statement on page 4.
Share Issues
The Company did not issue any ordinary shares in the year to
31 December 2024 (2023: nil). Since the year end and as at the
date of this Annual Report, no ordinary shares have been issued.
The authorities to issue shares and to disapply pre-emption rights
expire at the AGM on 8 May 2025 and resolutions to renew these
authorities will be put to shareholders at this AGM.
Share Repurchases
The Company did not repurchase any ordinary shares into
Treasury or for cancellation in the year to 31 December 2024
(2023: nil). Since the year end and as at the date of this Annual
Report, no shares have been repurchased into Treasury or for
cancellation.
The authority to repurchase ordinary shares expires at the
AGM on 8 May 2025 and a resolution to renew the authority to
repurchase shares, either for cancellation or to buy into Treasury,
will be put to shareholders at this AGM.
Substantial Share Interests
As at 31 December 2024 and 28 February 2025, notification had
been received that the shareholders listed in the table below
held more than 3% of the voting share capital of the Company.
Shareholders
31 December
2024
%
28 February
2025
%
Fidelity Platform Investors 14.20 14.04
Quilter Cheviot Investment
Management 7.19 7.32
Evelyn Partners 7.03 7.20
Hargreaves Lansdown 6.48 6.43
Interactive Investor 5.61 5.64
Allspring Global Investments 5.49 5.37
Rathbones 4.50 4.52
RBC Brewin Dolphin Ireland 3.65 3.64
Craigs Investment Partners 3.12 3.21
An analysis of shareholders as at 31 December 2024 is detailed
in the table below.
Shareholders
% of voting
share capital
Private Investors
1
81.83
Mutual Funds 15.26
Insurance Funds 1.76
Pension Funds 0.65
Trading 0.50
Total 100.00
1 Includes Fidelity Platform Investors (14.20%).
Additional Information required in the Directors’ Report
Information on proposed dividends, financial instruments,
disclosure on Streamlined Energy and Carbon Reporting (SECR)
and Task Force on Climate-Related Financial Disclosures (TCFD) is
set out in the Strategic Report on pages 21 to 30.
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Annual Report 2024
ANNUAL GENERAL MEETING – THURSDAY, 8 MAY 2025 at
11.00 AM
THIS SECTION IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION.
If you are in any doubt as to the action you should take, you
should seek advice from your stockbroker, bank manager,
solicitor or other financial adviser authorised under the
Financial Services and Markets Act 2000.
The AGM of the Company will be held at 11.00 am on Thursday,
8 May 2025 at 4 Cannon Street, London EC4M 5AB and virtually
via the online Lumi AGM meeting platform. Full details of the
meeting are given in the Notice of Meeting on pages 77 to 80.
For those shareholders who are unable to attend in person, we
will live-stream the formal business and presentations of the
meeting online.
Properly registered shareholders joining the AGM virtually will
be able to vote on the proposed resolutions. See Note 9 to the
Notes to the Notice of Meeting on page 79 for details on how
to vote virtually. Investors viewing the AGM online will be able
to submit live written questions to the Board and the Portfolio
Managers and we will answer as many as possible at an
appropriate juncture during the meeting.
Further information and links to the Lumi platform may be found
on the Company’s website www.fidelity.co.uk/europe. On the
day of the AGM, in order to join electronically and ask questions
via the Lumi platform, shareholders will need to connect to the
website https://web.lumiagm.com.
We urge shareholders to vote and make use of the proxy form
provided. Please note that investors on platforms such as Fidelity
Personal Investing, Hargreaves Lansdown, Interactive Investor
or AJ Bell Youinvest, will need to request attendance at the
AGM in accordance with the policies of your chosen platform.
They may request that you submit electronic votes in advance
of the meeting. If you are unable to obtain a unique IVC and
PIN from your nominee or platform, we will also welcome online
participation as a guest. Once you have accessed https://web.
lumiagm.com from your web browser on a tablet or computer,
you will need to enter the Lumi Meeting ID which is 124004169.
You should then select the ‘Guest Access’ option before entering
your name and who you are representing, if applicable. This will
allow you to view the meeting and ask questions but you will not
be able to vote.
Fidelity Platform Investors – Voting at AGMs
If you hold your shares in the Company through the Fidelity
Platform, then Fidelity passes on to you the right to vote on the
proposed resolutions at the Company’s AGM. Fidelity Platform
Investors are advised to vote online via the Broadridge Service
(a company that specialises in investor voting facilities). Investors
can sign up to this facility via their Fidelity Investor Account.
Proxy Voting
A paper Proxy Form will be sent to all shareholders who hold
shares on the main share register. This will assist shareholders to
vote in advance of the meeting should they decide not to attend
in person.
If you have sold, transferred or otherwise disposed of all your
shares in the Company, you should pass this document, together
with any accompanying documents, as soon as possible to the
purchaser or transferee, or to the stockbroker, bank or other
agent through whom the sale or transfer was effected, for onward
transmission to the purchaser or transferee.
At the AGM on 8 May 2025, resolutions will be proposed
relating to the items of business set out in the Notice of Meeting
on pages 77 and 78, including the items of special business
summarised below and on the next page.
Authority to Allot Shares
Resolution 11 is an ordinary resolution and provides the Directors
with a general authority to allot securities in the Company up
to an aggregate nominal value of £520,559. If passed, this
resolution will enable the Directors to allot a maximum of
20,822,360 ordinary shares which represents approximately 5%
of the issued ordinary share capital of the Company (including
Treasury shares) as at 19 March 2025, and to impose any limits
or restrictions and make any arrangements which they consider
necessary or appropriate to deal with Treasury shares, fractional
entitlements, record dates, legal, regulatory or practical problems
in, or under the laws of, any territory or any other matter.
The Directors would not intend to use this power unless they
considered that it was in the interests of shareholders to do so.
Any shares issued would be at NAV per ordinary share or at a
premium to NAV per ordinary share.
Authority to Disapply Pre-Emption Rights
Resolution 12 is a special resolution disapplying pre-emption
rights and granting authority to the Directors, without the need
for further specific shareholder approval, to make allotments
of equity securities or sale of Treasury shares for cash up to an
aggregate nominal value of £520,559 (including Treasury shares)
and represents approximately 5% of the issued ordinary share
capital of the Company as at 19 March 2025 and equivalent to
20,822,360 ordinary shares.
Authority to Repurchase Shares
Resolution 13 is a special resolution which renews the Company’s
authority to purchase up to 14.99% (61,268,680) of the ordinary
shares in issue (excluding Treasury shares) on 19 March 2025,
either for immediate cancellation or for retention as Treasury
shares, at the determination of the Directors. Once shares are
held in Treasury, the Directors may only dispose of them in
accordance with the relevant legislation by subsequently selling
the shares for cash or by cancelling the shares. Purchases of
ordinary shares will be at the discretion of the Directors and
within guidelines set by them from time to time in the light of
prevailing market conditions. Purchases will only be made in the
market at prices below the prevailing NAV per ordinary share.
Directors’ Report continued
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Annual Report 2024
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Continuation Vote
Resolution 14 is an ordinary resolution regarding the continuation
of the Company as an investment trust for a further two years.
The Directors expect this continuation vote to pass.
Proposed changes to the Company’s of New Articles
ofAssociation
Resolution 15 is a special resolution regarding the adoption of
New Articles of Association (“New Articles”) by the Company.
Summarised below are the principal changes proposed to be
introduced through the adoption of New Articles by the Company.
A copy of the proposed New Articles showing all the changes
as against the current Articles of Association is available for
inspection at www.fidelity.co.uk/specialvalues, together with
a copy of the current Articles of Association and a ‘clean’ copy
of the New Articles (which do not highlight the amendments),
from the date of this report until the end of the AGM (and at the
AGM itself for the duration of the meeting and for at least 15
minutes prior to the meeting). The documents are also available
for inspection at Simmons & Simmons LLP, 1 Ropemaker Street,
London EC2Y 9SS until the close of the AGM.
Directors’ fees
The Board considers it is appropriate to increase the limit on
Directors’ fees (“Fee Cap”), which was set at the Company’s
Annual General Meeting in 2010 at £50,000 per annum per
Director, and to express the Fee Cap as an aggregate amount
for all Directors to provide greater flexibility. The proposed
new Fee Cap is £350,000 in aggregate per annum. The Board
considers that the increase and change to an aggregate Fee
Cap will provide sufficient head-room to enable the Board to
execute any succession plans for the future. The Board is satisfied
that this new Fee Cap is in-keeping with current market practice.
Clarificatory, administrative and technical changes
Various changes of a minor, clarificatory or technical nature
are not commented on separately. This includes in relation to
arrangements for validity of proxies, to provide for if there are too
few directors following retirements at annual general meetings
and clarifications in relation to hybrid general meetings to follow
how practice has developed. The Board does not however
have any plans at this stage to allow general meetings to be
held purely by electronic means, and so no provision has been
included in the New Articles to provide for fully virtual meetings.
Recommendation: The Board considers that each of
the resolutions is likely to promote the success of the
Company and is in the best interests of the Company and
its shareholders as a whole. The Directors unanimously
recommend that you vote in favour of the resolutions as they
intend to do in respect of their own beneficial holdings.
By Order of the Board
FIL Investments International
Secretary
19 March 2025
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Fidelity European Trust PLC
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Annual Report 2024
The Corporate Governance Statement forms part of the Directors’
Report. The Company is committed to maintaining high standards
of corporate governance. Accordingly, the Board has put in
place a framework for corporate governance which it believes is
appropriate for an investment company.
Corporate Governance Codes
The Board follows the principles and provisions of the UK
Corporate Governance Code (the “UK Code”) issued by the
Financial Reporting Council (the “FRC”) in July 2018 and the AIC’s
Code of Corporate Governance (the “AIC Code”) issued by the
Association of Investment Companies (the “AIC”) in February
2019. The AIC Code addresses the principles and provisions of
the UK Code. The FRC has confirmed that investment companies
which report against the AIC Code will meet their obligations
under the UK Code and paragraph 6.6.6R (6) of the UK Listing
Rules. This statement, together with the Statement of Directors’
Responsibilities on page 43, set out how the principles have
been applied.
The AIC Code can be found on the AIC’s website at
www.theaic.co.uk and the UK Code on the FRC’s website at
www.frc.org.uk.
Statement of Compliance
The Company has complied with the recommendations of the AIC
Code and the relevant provisions of the UK Code for the year
under review and up to the date of this Annual Report, except in
relation to the UK Code provisions relating to the role of the chief
executive, executive directors’ remuneration, and the need for an
internal audit function. The Board considers that these provisions
are not relevant to the position of the Company, as it is an
externally managed investment company and has no executive
directors, employees or internal operations. All of its day to day
management and administrative functions are delegated to the
Manager.
THE BOARD
Board Composition
The Board, chaired by Vivian Bazalgette, consists of six non-
executive Directors as at the date of this Annual Report. The size
of the Board will revert to five non-executive Directors when Mr
Bazalgette steps down from the Board at the conclusion of AGM
on 8 May 2025. The Directors believe that, between them, they
have good knowledge and wide experience of Europe and of
investment companies, and that the Board has an appropriate
balance of skills, experience, independence and knowledge of
the Company and length of service to discharge its duties and
provide effective strategic leadership and proper governance of
the Company.
Paul Yates is the Senior Independent Director and fulfils the
role as a sounding board for the Chairman, intermediary for
the other Directors as necessary, and to act as a channel of
communication for shareholders in the event that contact through
the Chairman is inappropriate.
Biographical details of all serving Directors are on page 31.
Board Responsibilities
The Board has overall responsibility for the Company’s affairs
and for promoting the long-term success of the Company. All
matters which are not delegated to the Company’s Manager
under the Management Agreement are reserved for the Board’s
decision. Matters reserved for the Board and considered at
meetings include decisions on strategy, management, structure,
capital, share issues, share repurchases, gearing, financial
reporting, risk management, investment performance, share price
discount, corporate governance, Board appointments, and the
appointments of the Manager and the Company Secretary. The
Board also considers shareholder issues including communication
and investor relations.
All Directors are independent of the Manager and considered
to be free from any relationship which could materially interfere
with the exercise of their independent judgement. Directors are
required to disclose all potential conflicts of interests as they
arise for consideration and approval. The Board is satisfied that
no conflicts have risen in the year under review.
All Directors are able to allocate sufficient time to the Company
to discharge their responsibilities fully and effectively. Each
Director is entitled to take independent professional advice, at
the Company’s expense, in the furtherance of their duties.
Board Meetings
The Board considers that it meets sufficiently regularly to
discharge its duties effectively and the table on the next page
gives the attendance record for the meetings held in the
reporting year. In addition to the formal Board and Committee
meetings, the Board also holds a separate annual strategy
meeting. The Portfolio Managers and key representatives of the
Manager also attend these meetings. Regular Board meetings
exclude ad hoc meetings for formal approvals or to address any
key issues which may have risen.
In addition to the formal Board and Committee meetings, the
Board undertakes a two day due diligence trip to Europe every
other year. The next due diligence trip is planned to take place in
November 2025. The Directors also have meetings with Fidelity’s
Head of Investment Companies and attend educational days
organised by the Manager.
Between these meetings there is regular contact with the
Manager and other meetings are arranged as necessary.
Additionally, Board Committees and sub-groups meet to pursue
matters referred to them by the Board and the Chairman is in
contact with the other Directors without representatives of the
Manager being present.
Corporate Governance Statement
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Annual Report 2024
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Board’s Attendance Record for the Reporting Year
Regular
Board
Meetings
Audit
Committee
Meetings
Management
Engagement
Committee
Meetings
Vivian Bazalgette
1
5/5 3/3
1/1
Fleur Meijs 5/5 3/3 1/1
Milyae Park 5/5 3/3 1/1
Sir Ivan Rogers 5/5 3/3 1/1
Davina Walter
2
1/1 1/1 n/a
Paul Yates 5/5 3/3 1/1
1 Vivian Bazalgette, as Chairman of the Board, was invited to attend all of the Audit Committee meetings held in the reporting year.
2 Appointed on 1 November 2024.
Company Secretary
The Board has access to the advice and services of the Company
Secretary. The Company Secretary is responsible to the Board for
ensuring that Board procedures are followed and that applicable
rules and regulations are complied with.
Changes to the Board
Changes to the Board take place in accordance with the
Companies Act 2006, the Company’s Articles of Association
and the AIC Code. Any proposal for the appointment of new
Directors is discussed and approved by the whole Board. As
a consequence, there is no Nomination Committee. External
consultants who have no connection with the Company are used
to identify potential candidates.
Director Training
On appointment to the Board, each Director receives a full,
formal and tailored induction. Directors are also regularly
provided with key information on the Company’s policies,
regulatory and statutory requirements and internal controls.
Changes affecting Directors’ responsibilities are advised to
the Board as they arise. Directors also regularly participate
in relevant training and industry seminars. Training and
development needs are considered as part of the annual Board
and Committee’s evaluation process.
Election and Re-Election of Directors
All newly appointed Directors stand for election by the
shareholders at the AGM following their appointment by the
Board. As the Company is a constituent member of the FTSE
350 Index, all other Directors are subject to annual re-election.
Directors standing for election and re-election at this year’s
AGM are listed with their biographical details on page 31. The
terms and letters of appointment of Directors are available for
inspection at the registered office of the Company.
Board Evaluation
As part of the process of the election and re-election of the
Directors, an annual evaluation of the Board, its Directors and
its Committees is undertaken ahead of each AGM. It takes the
form of written questionnaires and discussions. For the year
under review, the performance and contribution to the Company
of each Director was considered using written questionnaires.
The performance of the Chairman was evaluated by the other
Directors in the Chairman’s absence. It was concluded that
the Chairman and each Director had been effective and that
they continue to demonstrate commitment to their roles. The
evaluation found that the Board functioned well with the right
balance of membership and skills. The process is considered
to be constructive in terms of identifying areas for improving the
functioning and performance of the Board and its Committees and
action is taken on the basis of the results. The tenure of individual
Directors is also considered during the evaluation process.
As a FTSE 350 Company and in accordance with provision 21
of the 2018 UK Corporate Governance Code, the Board carried
out an externally facilitated evaluation in 2023. The new 2024 UK
Corporate Governance Code has removed the requirement for
mandatory external evaluations every third year. Instead this will
be at the discretion of the Board.
Directors Remuneration and Share Interests
Details of the Directors’ remuneration and their share interests are
disclosed in the Directors’ Remuneration Report on pages 41 and
42.
BOARD COMMITTEES
The Board has two Committees, as set out below and on the
next page, through which it discharges certain of its corporate
governance responsibilities. These are the Audit Committee and
the Management Engagement Committee. Terms of reference of
each Committee are available on the Company’s pages of the
Manager’s website at www.fidelity.co.uk/europe.
Audit Committee
The Audit Committee is chaired by Fleur Meijs and consists of
all of the Directors, except for Vivian Bazalgette, which is in line
with the recommendation of the 2018 UK Corporate Governance
Code that a chairman of a board should not be a member of
an audit committee. Mr Bazalgette is invited to attend the Audit
Committee meetings as a guest.
Full details of the Audit Committee, including its role and
responsibilities, are disclosed in the Report of the Audit
Committee on pages 44 to 46.
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Fidelity European Trust PLC
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Annual Report 2024
Management Engagement Committee
Composition
The Management Engagement Committee is chaired by Vivian
Bazalgette and consists of all of the Directors.
Role and Responsibilities
The Committee is charged with reviewing and monitoring the
performance of the Manager and for ensuring that the terms
of the Company’s Management Agreement remain competitive
and reasonable for shareholders. It meets at least once a year
and reports to the Board, making recommendations where
appropriate.
Manager’s Reappointment
Ahead of the AGM on 8 May 2025, the Committee has reviewed
the performance of the Manager and the current fee structure
and also that of its peers. The Committee noted the Company’s
good long-term performance record compared to the Benchmark
Index. It also noted the commitment, quality and continuity of
the team responsible for the Company and concluded that it
was in the interests of shareholders that the appointment of the
Manager should continue. Details of the fee structure for the
year ended 31 December 2024 are in the Directors’ Report on
page 32.
ACCOUNTABILITY AND AUDIT
Financial Reporting
Set out on page 43 is a statement by the Directors of their
responsibilities in respect of the preparation of the Annual Report
and Financial Statements. The Auditor has set out its reporting
responsibilities within the Independent Auditor’s Report to the
Members on pages 47 to 52.
The Board has a responsibility to present fair, balanced and
understandable annual and half-yearly financial statements. All
financial statements are reviewed by the Audit Committee and
approved by the Board prior to their issue to ensure that this
responsibility is fulfilled.
Risk Management and Internal Controls
The Board is responsible for the Company’s systems of risk
management and of internal controls and for reviewing their
effectiveness. The review takes place at least once a year. Such
systems are designed to manage rather than eliminate the risk
of failure to achieve business objectives and can only provide
reasonable, but not absolute, assurance against material
misstatement or loss.
The Board determines the nature and extent of any risks it is
willing to take in order to achieve its strategic objectives. It is
responsible for the design, implementation and maintenance of
controls and procedures to safeguard the assets of the Company
although these tasks have been delegated on a day-to-day basis
to the Manager. The system extends to financial, operational
and compliance controls and risk management. Clear lines of
accountability have been established between the Board and the
Manager. The Manager provides regular reports on controls and
compliance issues to the Audit Committee and the Board.
In carrying out its review, the Audit Committee has regard to the
activities of the Manager, the Manager’s compliance and risk
functions and the work carried out by the Company’s Auditor
relevant to the Company’s audit. It also includes consideration
of internal controls covered in similar reports issued by the other
service providers.
The Board, assisted by the Manager, has undertaken a rigorous
risk and controls assessment. This process also assists in
identifying any new emerging risks and the actions necessary to
mitigate their potential impact. The Board confirms that there is
an effective robust ongoing process in place to identify, evaluate
and manage the Company’s principal business and operational
risks, and that it has been in place throughout the year ended
31 December 2024 and up to the date of this report. This process
is in accordance with the FRC’s “Risk Management, Internal
Control and Related Financial Business Reporting” guidance.
The Board has reviewed the need for an internal audit
function and has determined that the systems and procedures
employed by the Manager, which are subject to inspection by
the Manager’s internal and external audit processes, provide
sufficient assurance that a sound system of internal controls
is maintained to safeguard shareholders’ investments and
the Company’s assets. An internal audit function, specific to
the Company is, therefore, considered unnecessary. The Audit
Committee meets the Manager’s internal audit representative
at least once a year. It receives a summary of the Manager’s
externally audited internal controls report on an annual basis.
Whistle-Blowing Procedure
Part of the Manager’s role in ensuring the provision of a good
service pursuant to the Management Agreement, includes
the ability for employees of Fidelity to raise concerns through
a workplace concerns escalation policy (or “whistle-blowing
procedure”). Fidelity has advised the Board that it is committed
to providing the highest level of service to its customers and to
applying the highest standards of quality, honesty, integrity and
probity. The aim of the policy is to encourage employees and
others working for Fidelity to assist the Company in tackling fraud,
corruption and other malpractice within the organisation and in
setting standards of ethical conduct. Accordingly, this policy has
been endorsed by the Board.
Bribery Act 2010
The Company is committed to carrying out business fairly,
honestly and openly. The Board recognises the benefits this has
for reputation and business confidence. The Board, the Manager,
the Manager’s employees and others acting on the Company’s
behalf, are expected to demonstrate high standards of behaviour
when conducting business.
The Board acknowledges its responsibility for the implementation
and oversight of the Company’s procedures for preventing
bribery, and the governance framework for training,
communication, monitoring, reporting and escalation of
compliance together with enforcing actions as appropriate. The
Board has adopted a zero tolerance policy in this regard.
Corporate Governance Statement continued
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Annual Report 2024
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Criminal Finances Act 2017
The Company is subject to the Criminal Finances Act 2017 and
follows a zero tolerance policy to tax evasion and its facilitation.
The Directors are fully committed to complying with all legislation
and appropriate guidelines designed to prevent tax evasion
and the facilitation of tax evasion in the jurisdictions in which
the Company, its service providers, counterparties and business
partners operate.
Responsibility as an Institutional Shareholder
The Board has adopted the Manager’s Principles of Ownership
in relation to investments. These Principles include the pursuit
of an active investment policy through portfolio management
decisions, voting on resolutions at general meetings and
maintaining a continuing dialogue with the management of
investee companies. Fidelity International is a signatory to the
UK Stewardship Code which sets out the responsibilities of
institutional Shareholders and agents. Further details of the
Manager’s Principles of Ownership and voting may be found at
www.fidelity.co.uk.
Relations with Shareholders
Communication with shareholders is given a high priority by
the Board and it liaises with the Manager and the Company’s
broker who are in regular contact with the Company’s major
institutional investors to canvass shareholder opinion and to
communicate its views to shareholders. All Directors are made
aware of shareholders’ concerns and the Chairman, the Senior
Independent Director and, where appropriate, other Directors,
are available to meet with shareholders to discuss strategy
and governance. The Board regularly monitors the shareholder
profile of the Company and receives regular reports from the
Manager on meetings attended with shareholders and any
concerns raised in such meetings. The Board aims to provide
the maximum opportunity for dialogue between the Company
and its shareholders. If any shareholder wishes to contact a
member of the Board directly, they should either email the
Company Secretary at investmenttrusts@fil.com or in writing at
FIL Investments International, Beech Gate, Millfield Lane, Lower
Kingswood, Tadworth, Surrey KT20 6RP. The Company Secretary
will attend to any enquiries promptly and ensure that they are
directed to the Chairman, Senior Independent Director or the
Board as a whole, as appropriate.
The Board encourages all shareholders to attend the Company’s
AGM on 8 May 2025, details of which can be found on page 5.
Full details of the Notice of Meeting are on pages 77 to 80.
Voting Rights in the Company’s Shares
Each person entitled to vote on a show of hands has one vote.
On a poll, each shareholder who is present in person or by proxy
or a representative has one vote for every ordinary share held. At
general meetings, all proxy votes are counted and, except where
a poll is called, proxy voting is reported for each resolution after
it has been dealt with on a show of hands. The proxy voting
results are disclosed on the Company’s pages of the Manager’s
website www.fidelity.co.uk/europe after the AGM.
Articles of Association
Any changes to the Company’s Articles of Association must be
made by special resolution. A special resolution to alter the
Company’s Articles of Association is being proposed at this
year’s AGM on 8 May 2025. Further details of the proposed
changes are on page 35.
On Behalf of the Board
Vivian Bazalgette
Chairman
19 March 2025
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Annual Report 2024
Chairman’s Statement
The Directors’ Remuneration Report for the year ended
31December 2024 has been prepared in accordance with the
Large & Medium-sized Companies & Groups (Accounts & Reports)
(Amendment) Regulations 2013 (the “Regulations”). As the Board
is comprised entirely of non-executive Directors and has no
chief executive and employees, many parts of the Regulations,
in particular those relating to chief executive officer pay and
employee pay, do not apply and are therefore not disclosed in
this report.
An ordinary resolution to approve the Directors’ Remuneration
Report will be put to shareholders at the AGM on 8 May 2025.
The Company’s Auditor is required to audit certain sections of
this report and where such disclosures have been audited, the
specific section has been indicated as such. The Auditor’s opinion
is included in its report on pages 47 to 52.
Directors’ Remuneration
The annual fee structure from 1 January 2025 is as follows:
Role
1 January
2025
£
1 January
2024
£
Chairman 50,000 48,000
Senior Independent Director 36,500 33,500
Chair of the Audit Committee 39,000 37,250
Director 32,500 31,000
Levels of remuneration are reviewed to ensure that they remain
competitive and sufficient to attract and retain the quality of
Directors needed to manage the Company successfully.
The Remuneration Policy
The Company’s Articles of Association limit the aggregate fees
payable to each Director to £50,000 per annum. Subject to this
overall limit, it is the Board’s policy to determine the level of
Directors’ fees having regard to the time spent by them on the
Company’s affairs; the level of fees payable to non-executive
directors in the industry generally; the requirement to attract
and retain individuals with suitable knowledge and experience;
and the role that individual Directors fulfil. Other than fees and
reasonable out-of-pocket expenses incurred in attending to the
affairs of the Company, the Directors are not eligible for any
performance related pay or benefits, pension related benefits,
share options, long-term incentive schemes, or other taxable
benefits. The Directors are not entitled to exit payments and are
not provided with any compensation for loss of office.
The level of Directors’ fees is determined by the whole Board.
Directors do not vote on their own fees. The Board reviews the
Company’s Remuneration Policy and implementation on an
annual basis. Reviews are based on information provided by
the Company’s Manager and research from third parties and it
includes information on the fees of other similar investment trusts.
As a FTSE 350 Company, and in accordance with provision 21 of
the 2018 UK Corporate Governance Code, the Board is required
to carry out an externally facilitated evaluation every third year of
its performance and also includes input into the appropriate level
of Directors’ fees from an independent source.
No Director has a service contract with the Company. New
Directors are provided with a letter of appointment which,
amongst other things, provides that their appointment is subject
to the Companies Act 2006 and the Company’s Articles of
Association. Copies of the Directors’ letters of appointment are
available at each of the Company’s AGMs and can be obtained
from the Company’s registered office.
In common with most investment trusts there is no Chief Executive
Officer and there are no employees.
The Company’s remuneration policy will apply to new Board
members, who will be paid the equivalent amount of fees as
current Board members.
Voting on the Remuneration Policy
The Remuneration Policy (the “Policy”), as set out above, was
approved at the AGM on 10 May 2023 with 99.52% of votes
cast in favour, 0.26% of votes cast against and 0.22% of votes
withheld. The Policy has been followed throughout the year
ended 31December 2024 and up to the date of this report.
If the changes being proposed in the Company’s Articles of
Association are approved at the AGM on 8 May 2025, then the
updated Policy will be put to shareholders at the AGM in May
2026 and the votes cast will be disclosed on the Company’s
website at www.fidelity.co.uk/europe.
Voting on the Directors’ Remuneration Report
The Directors’ Remuneration Report for the year ended
31December 2023 was approved at the AGM held on 8 May
2024 with 99.66% of votes cast in favour, 0.21% of votes cast
against and 0.13% of votes withheld.
The Directors’ Remuneration Report for the year ended
31December 2024 will be put to shareholders at the AGM
on 8May 2025, and the votes cast will be disclosed on the
Company’s pages of the Manager’s website at www.fidelity.
co.uk/europe.
Single Total Figure of Remuneration
The single total aggregate Directors’ remuneration for the year
ended 31 December 2024 was £185,917 (2023: £169,000). No
taxable expenses were claimed by any Director in attending to
the affairs of the Company. Information on individual Directors’
fees is disclosed in the table on the next page.
Directors’ Remuneration Report
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Annual Report 2024
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Remuneration of Directors
2025 2024 2024 2024 2023 2023 2023
Projected
Fees
Fees
(Audited)
Taxable
Expenses
(Audited)
Total
(Audited)
Fees
(Audited)
Taxable
Expenses
(Audited)
Total
(Audited)
(£) (£) (£) (£) (£) (£) (£)
Vivian Bazalgette
1
17,535 48,000 – 48,000 44,500 – 44,500
Fleur Meijs 39,000 37,250 – 37,250 35,000 – 35,000
Milyae Park 32,500 31,000 – 31,000 29,000 – 29,000
Sir Ivan Rogers 32,500 31,000 – 31,000 29,000 – 29,000
Davina Walter
2
43,910 5,167 – 5,167 n/a n/a n/a
Paul Yates 36,500 33,500 – 33,500 31,500 – 31,500
Total 201,945 185,917 – 185,917 169,000 – 169,000
1 Retiring on 8 May 2025.
2 Appointed on 1 November 2024 as a non-executive Director and will take over as Chairman of the Board on 8 May 2025 at the conclusion of the AGM.
Five Year Change Comparison in Directors’ Remuneration
The table below shows the change in Directors’ fees over the last five years.
Director 2024 2019 Change (%)
Chairman 48,000 40,000 +20.0
Senior Independent Director 33,500 28,500 +17.5
Audit Committee Chair 37,250 30,000 +24.2
Director 31,000 26,000 +19.2
Expenditure on Directors’ Remuneration and Distributions to Shareholders
The table below shows the total amount paid out in Directors’ remuneration and distributions to shareholders. The projected Directors’
remuneration for the year ending 31 December 2025 is disclosed in the table above.
31 December
2024
£
31 December
2023
£
Expenditure on Directors’ Remuneration:
Fees and taxable expenses 185,917 169,000
Distributions to Shareholders:
Dividend payments 35,110,000 32,208,000
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Annual Report 2024
Performance
The Company’s investment objective is to achieve long-term growth in both capital and income by predominantly investing in equities
(and their related securities) of continental European companies. The graph below shows the performance of the Company’s NAV,
ordinary share price and the FTSE World Europe ex UK Index for ten years to 31 December 2024.
Total return performance for ten years to 31 December 2024
+175.8%
+128.5%
Dec
23
Dec
24
Dec
14
Dec
15
Dec
16
Dec
17
Dec
18
Dec
19
Dec
20
Dec
21
Dec
22
60
80
100
120
140
160
180
200
220
240
260
280
300
+174.0%
NAV per ordinary share
Ordinary share price
FTSE World Europe ex UK Index
Directors’ Interest in the Company’s Ordinary Shares
Although there is no requirement for the Directors to hold shares in the Company, shareholdings by Directors is encouraged. The table
below shows the interests of the Directors in the ordinary shares of the Company. All of the shareholdings are beneficial.
Directors’ Shareholdings (Audited)
31 December
2024
31 December
2023
Change
during year
Vivian Bazalgette 30,000 30,000 –
Fleur Meijs 28,970 28,970 –
Milyae Park 10,000 10,000 –
Sir Ivan Rogers
1
8,749 4,569 4,180
Davina Walter
2
55,000 n/a n/a
Paul Yates 32,000 32,000 –
1 Purchase of shares.
2 Held by self and connected person at appointment on 1 November 2024.
All Directors’ shareholdings remain unchanged as at the date of this report.
On Behalf of the Board
Vivian Bazalgette
Chairman
19 March 2025
Directors’ Remuneration Report continued
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Annual Report 2024
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
The Directors are responsible for preparing the Annual Report
and Financial Statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial period. Under that law, the Directors
have elected to prepare the Financial Statements in accordance
with UK Generally Accepted Accounting Practice (UK Accounting
Standards and applicable law), including Financial Reporting
Standard FRS 102: The Financial Reporting Standard applicable
in the UK and Republic of Ireland (“FRS 102”). Under company
law, the Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair view of the
state of affairs of the Company and of the profit or loss for the
reporting period.
In preparing these Financial Statements, the Directors are
required to:
• Select suitable accounting policies in accordance with
Section 10 of FRS 102 and then apply them consistently;
• Make judgements and estimates that are reasonable and
prudent;
• Present information, including accounting policies, in a
fair and balanced manner that provides relevant, reliable,
comparable and understandable information;
• State whether applicable UK Accounting Standards, including
FRS 102, have been followed, subject to any material
departures disclosed and explained in the Financial
Statements; and
• Prepare the Financial Statements on a going concern basis,
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy, at any
time, the financial position of the Company and enable them to
ensure that the Company and the Financial Statements comply
with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, a Directors’
Report, a Corporate Governance Statement and a Directors’
Remuneration Report which comply with that law and those
regulations.
The Directors have delegated the responsibility for the
maintenance and integrity of the corporate and financial
information included on the Company’s pages of the Manager’s
website at www.fidelity.co.uk/europe to the Manager. Visitors
to the website need to be aware that legislation in the UK
governing the preparation and dissemination of the Financial
Statements may differ from legislation in their own jurisdictions.
The Directors confirm that to the best of their knowledge:
• The Financial Statements, prepared in accordance with UK
Generally Accepted Accounting Practice, including FRS 102,
give a true and fair view of the assets, liabilities, financial
position and profit of the Company;
• The Annual Report, including the Strategic Report, includes
a fair review of the development and performance of the
business and the position of the Company, together with a
description of the principal risks and uncertainties it faces;
and
• The Annual Report and Financial Statements, taken as a
whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the
Company’s performance, business model and strategy.
The Statement of Directors’ Responsibilities was approved by the
Board on 19 March 2025 and signed on its behalf by:
Vivian Bazalgette
Chairman
Statement of Directors’ Responsibilities
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I am pleased to present the formal report of the Audit Committee
(the “Committee”) to shareholders.
The primary responsibilities of the Committee are to ensure
the integrity of the Company’s financial reporting, the
appropriateness of the risk management and internal controls
processes (see page 38 for further details) and the effectiveness
of the independent audit process and how this has been
assessed for the year ended 31December 2024.
Composition of the Committee
The members of the Committee are myself as Chair and all
of the other Directors, except for Vivian Bazalgette, which is
in line with the recommendation in the 2018 UK Corporate
Governance Code that a Chairman of a Board should not be a
member of the Audit Committee. He is usually invited to attend
the Committee meetings as a guest. All Committee members
are independent non-executive Directors and collectively have
sufficient recent and relevant financial experience to discharge
their responsibilities fully.
The Committee’s performance is evaluated annually as part of
the overall Board evaluation process.
Role and Responsibilities of the Committee
The Committee’s authority and duties are clearly defined in its
terms of reference which are available on the Company’s pages
of the Manager’s website at www.fidelity.co.uk/europe.
These duties include:
• Establishing with the Auditor the nature and scope of the
audit, reviewing the Auditor’s quality control procedures
and reporting, the effectiveness of the audit process and
the Auditor’s independence and objectivity with particular
regard to the provision of non-audit services;
• Responsibility for making recommendations on the
appointment, reappointment and removal of the Auditor;
• Reviewing the effectiveness of the Company’s risk
management and internal control systems (including
financial, operational and compliance controls) and
considering the scope and obtaining sufficient assurance
of the work undertaken by the Manager’s Internal Audit
function;
• Monitoring the integrity of the Company’s half-yearly and
annual financial statements to ensure that they are fair,
balanced and understandable;
• Reviewing the existence and performance of controls
operating in the Company, including review of internal
controls reporting of its service providers; and
• Reviewing the relationship with and the performance of third
party service providers (such as the Registrar, Custodian and
Depositary).
Meetings and Business Considered by the Committee
Since the date of the last Annual Report (19 March 2024), the Committee has met three times and the Auditor attended the November
2024 and March 2025 meetings.
The following matters were reviewed at each Committee meeting:
• The Company’s risk management and internal controls framework;
• The Company’s compliance with its investment policy limits;
• The Depositary’s oversight reporting;
• The Company’s revenue and expenses forecasts and its Balance Sheet; and
• The Committee’s Terms of Reference.
Report of the Audit Committee
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Annual Report 2024
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
In addition, the following matters were also considered at the following meetings:
July 2024
• The Half-Yearly Report and Financial Statements for the six months ended 30 June 2024 and
recommendation of its approval to the Board.
• The Going Concern Statement.
• The interim dividend payment to be recommended to the Board for approval.
• Task Force on Climate-Related Financial Disclosures.
November 2024
• The Auditor’s audit plan for the Company’s year ending 31 December 2024, including the proposed
audit fee.
• Review of Fidelity’s Internal Audit reporting, including review of the Internal Audit plan.
• Review of Fidelity’s and third party service providers assurance reports on internal controls.
• Review of the Manager’s detailed risk matrix and mitigating controls.
• An assessment of emerging risks and their likelihood and potential impact.
March 2025
• The Auditor’s findings from the audit of the Company.
• The Auditor’s performance, independence and reappointment.
• Compliance with Corporate Governance and regulatory requirements.
• The Annual Report and Financial Statements and recommendation of its approval to the
Board following review and conclusion by the Committee that they are fair, balanced and
understandable.
• The Viability and Going Concern Statements, including an assessment on the ongoing impact
from the war in Ukraine, the Middle East conflict, significant market and geopolitical events and
regulatory changes, and also consideration of the upcoming continuation vote.
• The final dividend payment to be recommended to the Board and shareholders for approval.
The Board reviewed cybersecurity and potential threats and the controls in place to mitigate the risks at its strategy meeting held in
February 2025.
Annual Report and Financial Statements
The Annual Report and Financial Statements are the responsibility of the Board and the Statement of Directors’ Responsibilities can be
found on page 43. The Committee advises the Board on the form and content of the Annual Report and Financial Statements, any issues
which may arise in relation to these and any specific areas which require judgement.
Summarised below are the most significant issues considered by the Committee in respect of the Company’s Financial Statements for
the year ended 31 December 2024 and how these issues were addressed.
Recognition of
investment income
Investment income is recognised in accordance with Accounting Policy Note 2 (e) on pages 56 and
57. The Manager provided detailed revenue forecasts and the Committee reviewed and sought
explanations for any significant variances to these forecasts. The Committee also considered the
allocation of special dividends between revenue and capital and the reasons for the classification of
these special dividends. The Committee reviewed the internal audit and the compliance monitoring
reports received from the Manager, including an additional agreed upon procedures report in
connection with Investment Trust specific controls operated by FIL Investment Services (UK) Limited,
prepared by PricewaterhouseCoopers LLP to satisfy itself that adequate systems were in place for
properly recording the Company’s investment income. The Committee also reviewed the reports
provided by the Auditor on its work on the recognition of investment income, including the allocation of
special dividends.
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Annual Report 2024
Valuation,
existence and
ownership of
investments
(including
derivative
investments)
The valuation of investments (including derivatives) is in accordance with Accounting Policy Notes
2 (k) and 2 (l) on pages 57 and 58. The Committee took comfort from the Depositary’s regular
oversight function that investment related activities were conducted in accordance with the Company’s
investment policy. The Committee received reports from the Manager, the Depositary and an
additional agreed upon procedures report in connection with Investment Trust specific controls
operated by FIL Investment Services (UK) Limited, prepared by PricewaterhouseCoopers LLP which
concluded that the controls around the valuation, existence and ownership of investments, including
derivatives, operate effectively. The Committee also reviewed the reports provided by the Auditor
on its work on the valuation, existence and ownership of the Company’s investments, including the
derivative investments.
The Company confirms that it has complied with the September 2014 Competition and Markets Authority Order in relation to the
performance and appointment of the Auditor, as set out below.
Independence and Effectiveness of the Audit Process
Ernst & Young LLP acted as the Company’s Auditor for the year
ended 31 December 2024.
With regard to the independence of the Auditor, the Committee
reviewed:
• The Auditor’s arrangements for managing any conflicts of
interest;
• The fact that no non-audit services were provided to the
Company in the reporting year and up to the date of this
report; and
• The statement by the Auditor that it remains independent
within the meaning of the regulations and its professional
standards.
With regard to the effectiveness of the audit process, the
Committee reviewed:
• The fulfilment by the Auditor of the agreed audit plan,
including the audit team and approach to significant risks;
• The audit findings report issued by the Auditor on the audit
of the Annual Report and Financial Statements for the year
ended 31 December 2024; and
• Feedback from the Manager on the audit of the Company.
The Committee concluded that the Auditor continues to remain
independent and the audit process remains effective.
Auditor’s Appointment
Ernst & Young LLP was appointed as the Company’s Auditor on
12 May 2016 following a formal audit tender process in 2015.
The Committee has reviewed the Auditor’s independence and
the effectiveness of the audit process prior to recommending its
reappointment for a further year. The Auditor is required to rotate
audit partners every five years and this is the second year that
the current Audit Partner, Sarah Langston, has been in place. The
Committee will continue to review the Auditor’s appointment each
year to ensure that the Company continues to receive an optimal
level of service. There are no contractual obligations that restricts
the Company’s choice of auditor.
Audit Tender
The Company is required to conduct an audit tender process
every ten years and an audit tender will be completed in
2025. This process will be led by the Audit Committee who
will complete an assessment of external auditors’ proposals.
Following this assessment, a recommendation will be made to
the Board regarding whether a change of auditor should be
made.
Audit Fees
Fees paid to the Auditor for the audit of the Company’s Financial
Statements are disclosed in Note 5 on page 60. The audit fee for
the reporting year was £49,900 (2023: £48,500).
Fleur Meijs
Chair of the Audit Committee
19 March 2025
Report of the Audit Committee continued
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Fidelity European Trust PLC
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Opinion
We have audited the Financial Statements of Fidelity European
Trust PLC (“the Company”) for the year ended 31 December
2024 which comprise the Income Statement, the Statement of
Changes in Equity, the Balance Sheet and the related Notes 1
to 19, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their
preparation is applicable law and United Kingdom Accounting
Standards, including FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland” (“United Kingdom
Generally Accepted Accounting Practice”).
In our opinion, the Financial Statements:
• give a true and fair view of the Company’s affairs as at
31 December 2024 and of its profit for the year then ended;
• have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of
the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the Financial Statements
section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Company in accordance with the
ethical requirements that are relevant to our audit of the Financial
Statements in the UK, including the FRC’s Ethical Standard as
applied to public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the Company and we remain independent
of the Company in conducting the audit.
Conclusions relating to going concern
In auditing the Financial Statements, we have concluded that
the Directors’ use of the going concern basis of accounting in
the preparation of the Financial Statements is appropriate. Our
evaluation of the Directors’ assessment of the Company’s ability
to continue to adopt the going concern basis of accounting
included:
• Confirming our understanding of the Company’s going
concern assessment process by engaging with the Directors
and the Company Secretary to determine if all key factors
were considered in their assessment;
• Inspecting the Directors’ assessment of going concern,
including the revenue and expense forecast, for the period
to 31 March 2026 which is at least 12 months from the date
of approval of these Financial Statements. In preparing the
revenue and expense forecast, the Company has concluded
that it is able to continue to meet its ongoing costs as they
fall due;
• Reviewing the factors and assumptions, including the
impact of the current economic environment and other
significant events that could give rise to market volatility,
as applied to the revenue and expense forecast and the
liquidity assessment of the investments and determined,
through testing of the methodology and calculations, that the
methods, inputs and assumptions utilised are appropriate to
be able to make an assessment for the Company;
• Consideration of the mitigating factors included in the
revenue and expense forecast that are within the control
of the Company. We reviewed the Company’s assessment
of the liquidity of investments held and evaluated the
Company’s ability to sell those investments in order to
cover working capital requirements should revenue decline
significantly;
• Assessing the impact of the continuation vote at the 2025
Annual General Meeting on the going concern basis
of preparation by considering the current and historical
performance of the Company, obtaining the Broker’s
representation on certain shareholders about their current
intentions in relation to the continuation vote and assessing
the Directors’ own analysis of the impact the continuation
vote may have on going concern; and
• Reviewing the Company’s going concern disclosures
included in the Annual Report in order to assess that the
disclosures were appropriate and in conformity with the
reporting standards.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Company’s ability to continue as a going concern for a period to
31 March 2026 which is at least twelve months from the date of
approval of the Financial Statements.
In relation to the Company’s reporting on how they have applied
the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the Directors’ statement in
the Financial Statements about whether the Directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report. However, because not all future events or
conditions can be predicted, this statement is not a guarantee as
to the Company’s ability to continue as a going concern.
Independent Auditor’s Report to the Members
of Fidelity European Trust PLC
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Overview of our audit approach
Key audit matters
• Risk of incomplete or inaccurate revenue recognition, including the classification of special
dividends as revenue or capital items in the Income Statement
• Risk of incorrect valuation or ownership of the investment portfolio, including derivatives
Materiality
• Overall materiality of £15.63m which represents 1% of net asset value of the Company at
31 December 2024.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and
our allocation of performance materiality determine our audit
scope for the Company. This enables us to form an opinion on
the Financial Statements. We take into account size, risk profile,
the organisation of the Company and effectiveness of controls,
the potential impact of climate change and changes in the
business environment when assessing the level of work to be
performed. All audit work was performed directly by the audit
engagement team.
Climate change
Stakeholders are increasingly interested in how climate change
will impact the Company. The Company has determined that the
impact of climate change could affect the Company’s investments
and their valuations and potentially shareholder returns. These
are explained on page 23 in the principal and emerging risks
section, which form part of the “Other information,” rather than
the audited Financial Statements. Our procedures on these
unaudited disclosures therefore consisted solely of considering
whether they are materially inconsistent with the Financial
Statements or our knowledge obtained in the course of the audit
or otherwise appear to be materially misstated, in line with our
responsibilities on “Other information”.
Our audit effort in considering the impact of climate change on
the Financial Statements was focused on the adequacy of the
Company’s disclosures in the Financial Statements as set out in
Note 2(a) and the conclusion that there was no further impact of
climate change to be taken into account as the investments are
valued based on market pricing. In line with FRS 102 investments
are valued at fair value, which for the Company are quoted bid
prices for investments in active markets at the balance sheet
date and therefore reflect the market participants view of climate
change risk on the investments held by the Company. We also
challenged the Directors’ considerations of climate change in
their assessment of viability and associated disclosures.
Based on our work we have not identified the impact of climate
change on the Financial Statements to be a key audit matter or
to impact a key audit matter.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the Financial
Statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context
of our audit of the Financial Statements as a whole, and in our
opinion thereon, and we do not provide a separate opinion on
these matters.
Independent Auditor’s Report to the Members
of Fidelity European Trust PLC continued
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Fidelity European Trust PLC
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Risk Our response to the risk Key observations
communicated to the
Audit Committee
Risk of incomplete or inaccurate
revenue recognition, including the
classification of special dividends
as revenue or capital items in the
Income Statement
Refer to the Audit Committee Report (page 45);
Accounting Policies (pages 56 and 57); and
Note 3 of the Financial Statements (page 59).
The Company has reported revenue of £53.67m
(2023: £47.22m).
During the year, the Company received special
dividends amounting to £1.95m, of which £1.27m
were classified as capital (2023: £0.71m, all of
which were classified as capital).
There is a risk of incomplete or inaccurate
recognition of revenue through failure to
recognise proper income entitlements or to
apply an appropriate accounting treatment.
In addition to the above, the Directors are
required to exercise judgement in determining
whether income received in the form of special
dividends should be classified as ‘revenue’ or
‘capital’ in the Income Statement.
We performed the following procedures:
We obtained an understanding of the processes
and controls surrounding revenue recognition
and classification of special dividends by
performing our walkthrough procedures to
evaluate the design and implementation of
controls;
For all dividends received and accrued, we
recalculated the income by multiplying the
investment holdings at the ex-dividend date,
traced from the accounting records, by the
dividend rate as agreed to an independent
data vendor. We also agreed all exchange
rates to an external source and, for a sample of
dividends received and dividends accrued, we
agreed amounts to bank statements;
For all dividends accrued, we assessed
whether the dividend obligations arose prior to
31 December 2024 with reference to an external
source; we also agreed subsequent cash
receipts to post year-end bank statements where
applicable;
To test completeness of recorded income, we
tested that all expected dividends for each
investee company had been recorded as
income with reference to an external source; and
For all dividend income during the year, we
reviewed the type of dividends paid with
reference to an external source to identify those
which were special dividends. For two special
dividends, we assessed the appropriateness
of the Company’s classification as capital or
revenue by reviewing the rationale for the
underlying distribution.
The results of
our procedures
identified no material
misstatements in
relation to the risk
of incomplete or
inaccurate revenue
recognition, including
the classification of
special dividends as
revenue or capital
items in the Income
Statement.
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Risk Our response to the risk Key observations
communicated to the
Audit Committee
Risk of incorrect valuation or
ownership of the investment
portfolio, including derivatives
Refer to the Report of the Audit Committee
(page 46); Accounting Policies (pages 57 and
58); and Notes 10 and 11 of the Financial
Statements (pages 63 and 64).
The valuation of the listed investment portfolio
at 31 December 2024 was £1,487.77m (2023:
£1,518.88m). The Company also has net
derivative liabilities amounting to £5.80m (2023:
£2.64m).
The valuation of the assets held in the
investment portfolio is the key driver of the
Company’s net asset value and total return.
Incorrect investment pricing, or a failure to
maintain proper legal title to the investments
held by the Company could have a significant
impact on the portfolio valuation and the return
generated for shareholders.
The fair value of the listed investments and
derivatives is determined using quoted market
prices at close of business on the reporting date.
We performed the following procedures:
We obtained an understanding of the processes
and controls surrounding investment pricing
and legal title by performing our walkthrough
procedures;
For all listed investments in the portfolio, we
compared the market prices and exchange rates
applied to an independent pricing vendor. For
all derivatives, we compared the market prices
of the underlying instrument to an independent
pricing vendor and agreed cost price to the
Brokers’ confirmations. We recalculated the
investment and derivative valuations as at the
year end;
We inspected the stale pricing report to identify
prices that have not changed and noted none;
and
We compared the Company’s investment
holdings as at 31 December 2024 to
independent confirmations received directly from
the Company’s Custodian and Depositary. We
agreed all open year-end derivative positions to
confirmations received independently from the
Company’s Brokers.
The results of
our procedures
identified no material
misstatements in
relation to the risk of
incorrect valuation
or ownership of the
investment portfolio,
including derivatives.
Our application of materiality
We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements on
the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually
or in the aggregate, could reasonably be expected to influence
the economic decisions of the users of the Financial Statements.
Materiality provides a basis for determining the nature and extent
of our audit procedures.
We determined materiality for the Company to be £15.63m
(2023: £15.87m), which is 1% (2023: 1%) of Company’s net
asset value. We believe that the net asset value provides us
with materiality aligned to the key measure of the Company’s
performance.
Performance materiality
The application of materiality at the individual account
or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our
assessment of the Company’s overall control environment, our
judgement was that performance materiality was 75% (2023: 75%)
of our planning materiality, namely £11.72m (2023: £11.91m).
We have set performance materiality at this percentage due to
our past experience of the audit that indicates a lower risk of
misstatements, both corrected and uncorrected.
Given the importance of the distinction between revenue and
capital for investment trusts, we have also applied a separate
testing threshold for the revenue column of the Income Statement
of £2.35m (2023: £2.06m) being 5% (2023: 5%) of revenue profit
before tax.
Independent Auditor’s Report to the Members
of Fidelity European Trust PLC continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Reporting threshold
An amount below which identified misstatements are considered
as being clearly trivial.
We agreed with the Audit Committee that we would report to
them all uncorrected audit differences in excess of £0.78m (2023:
£0.79m), which is set at 5% of planning materiality, as well as
differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in light
of other relevant qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in
the Annual Report other than the Financial Statements and our
Auditor’s report thereon. The Directors are responsible for the
other information contained within the Annual Report.
Our opinion on the Financial Statements does not cover the other
information and, except to the extent otherwise explicitly stated in
this report, we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the Financial Statements, or our knowledge
obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement
in the Financial Statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of the other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the
audit:
• the information given in the Strategic Report and the
Directors’ Report for the financial year for which the Financial
Statements are prepared is consistent with the Financial
Statements; and
• the Strategic Report and Directors’ Reports have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company
and its environment obtained in the course of the audit, we have
not identified material misstatements in the Strategic Report or
Directors’ Report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept, or
returns adequate for our audit have not been received from
branches not visited by us; or
• the Financial Statements and the part of the Directors’
Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Company’s compliance
with the provisions of the UK Corporate Governance Code
specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the Financial
Statements or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 32;
• Directors’ explanation as to its assessment of the Company’s
prospects, the period this assessment covers and why the
period is appropriate set out on pages 27 and 28;
• Director’s statement on whether it has a reasonable
expectation that the Company will be able to continue in
operation and meets its liabilities set out on page 32;
• Directors’ statement on fair, balanced and understandable
set out on page 43;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
page 23;
• The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems set out on page 38; and
• The section describing the work of the Audit Committee set
out on page 44.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement
set out on page 43, the Directors are responsible for the
preparation of the Financial Statements and for being satisfied
that they give a true and fair view, and for such internal control as
the Directors determine is necessary to enable the preparation
of Financial Statements that are free from material misstatement,
whether due to fraud or error.
In preparing the Financial Statements, the Directors are
responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
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Annual Report 2024
concern and using the going concern basis of accounting unless
the Directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial
Statements
Our objectives are to obtain reasonable assurance about
whether the Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an Auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these Financial Statements.
Explanation as to what extent the audit was considered
capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including
fraud. The risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through
collusion. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and
detection of fraud rests with both those charged with governance
of the Company and management.
• We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Company and
determined that the most significant are United Kingdom
Generally Accepted Accounting Practice, the Companies
Act 2006, the Association of Investment Companies Code
of Corporate Governance, the Association of Investment
Companies Statement of Recommended Practice, the
Listing Rules, the UK Corporate Governance Code, Section
1158 of the Corporation Tax Act 2010 and The Companies
(Miscellaneous Reporting) Regulations 2018.
• We understood how the Company is complying with those
frameworks through discussions with the Audit Committee
and Company Secretary and review of Board minutes and
the Company’s documented policies and procedures.
• We assessed the susceptibility of the Company’s Financial
Statements to material misstatement, including how fraud
might occur by considering the key risks impacting the
Financial Statements. We identified a fraud risk with respect
to incomplete or inaccurate revenue recognition through
incorrect classification of special dividends as revenue or
capital items in the Income Statement. Further discussion of
our approach is set out in the section on key audit matters
above.
• Based on this understanding we designed our audit
procedures to identify non-compliance with such laws
and regulations. Our procedures involved review of the
reporting to the Directors with respect to the application of
the documented policies and procedures and review of the
Financial Statements to ensure compliance with the reporting
requirements of the Company.
A further description of our responsibilities for the audit
of the Financial Statements is located on the Financial
Reporting Council’s website at https://www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
Auditor’s report.
Other matters we are required to address
• Following the recommendation from the Audit Committee, we
were appointed by the Company on 12 May 2016 to audit
the Financial Statements for the year ending 31 December
2016 and subsequent financial periods.
The period of total uninterrupted engagement including previous
renewals and reappointments is 9 years, covering the years
ending 31 December 2016 to 31 December 2024.
• The audit opinion is consistent with the additional report to
the Audit Committee.
Use of our report
This report is made solely to the Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Company’s members those matters we are required
to state to them in an Auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and
the Company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Sarah Langston
Senior Statutory Auditor
for and on behalf of Ernst & Young LLP,
Statutory Auditor
London
19 March 2025
Independent Auditor’s Report to the Members
of Fidelity European Trust PLC continued
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Fidelity European Trust PLC
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Income Statement
for the year ended 31 December 2024
The Notes on pages 56 to 73 form an integral part of these Financial Statements.
Year ended 31 December 2024 Year ended 31 December 2023
Notes
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
(Losses)/gains on investments 10 – (47,301) (47,301) – 165,905 165,905
Gains on derivative instruments 11 – 35,423 35,423 – 50,441 50,441
Income 3 53,670 – 53,670 47,221 – 47,221
Investment management fees 4 (2,878) (8,634) (11,512) (2,625) (7,877) (10,502)
Other expenses 5 (1,063) – (1,063) (967) – (967)
Foreign exchange losses – (2,956) (2,956) – (1,464) (1,464)
Net return/(loss) on ordinary
activities before finance costs
and taxation 49,729 (23,468) 26,261 43,629 207,005 250,634
Finance costs 6 (2,770) (8,309) (11,079) (2,138) (6,414) (8,552)
Net return/(loss) on ordinary
activities before taxation 46,959 (31,777) 15,182 41,491 200,591 242,082
Taxation on return/(loss) on
ordinary activities 7 (4,422) – (4,422) (3,390) – (3,390)
Net return/(loss) on ordinary
activities after taxation for the
year 42,537 (31,777) 10,760 38,101 200,591 238,692
Return/(loss) per ordinary share 8 10.41p (7.78p) 2.63p 9.32p 49.08p 58.40p
The Company does not have any other comprehensive income. Accordingly, the net return/(loss) on ordinary activities after taxation
for the year is also the total comprehensive income for the year and no separate Statement of Comprehensive Income has been
presented.
The total column of this statement represents the Income Statement of the Company. The revenue and capital columns are
supplementary and presented for information purposes as recommended by the Statement of Recommended Practice issued by the
AIC.
No operations were acquired or discontinued in the year and all items in the above statement derive from continuing operations.
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Annual Report 2024
Statement of Changes in Equity
for the year ended 31 December 2024
Notes
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
shareholders’
funds
£’000
Total shareholders’ funds at
31 December 2023 10,411 58,615 5,414 1,472,587 40,452 1,587,479
Net (loss)/return on ordinary
activities after taxation for the year – – – (31,777) 42,537 10,760
Dividends paid to shareholders 9 – – – – (35,110) (35,110)
Total shareholders’ funds at
31 December 2024 10,411 58,615 5,414 1,440,810 47,879 1,563,129
Total shareholders’ funds at
31 December 2022 10,411 58,615 5,414 1,271,996 34,559 1,380,995
Net return on ordinary
activities after taxation for the year – – – 200,591 38,101 238,692
Dividends paid to shareholders 9 – – – – (32,208) (32,208)
Total shareholders’ funds at
31 December 2023 10,411 58,615 5,414 1,472,587 40,452 1,587,479
The Notes on pages 56 to 73 form an integral part of these Financial Statements.
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Annual Report 2024
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Fidelity European Trust PLC
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Balance Sheet
as at 31 December 2024
Company number 2638812
Notes
2024
£’000
2023
£’000
Fixed assets
Investments 10 1,487,772 1,518,875
Current assets
Derivative instruments 11 – 886
Debtors 12 9,506 11,449
Amounts held at futures clearing houses and brokers 10,078 8,384
Cash and cash equivalents 63,042 52,804
82,626 73,523
Current liabilities
Derivative instruments 11 (5,796) (3,521)
Other creditors 13 (1,473) (1,398)
(7,269) (4,919)
Net current assets 75,357 68,604
Net assets 1,563,129 1,587,479
Capital and reserves
Share capital 14 10,411 10,411
Share premium account 15 58,615 58,615
Capital redemption reserve 15 5,414 5,414
Capital reserve 15 1,440,810 1,472,587
Revenue reserve 15 47,879 40,452
Total shareholders’ funds 1,563,129 1,587,479
Net asset value per ordinary share 16 382.44p 388.39p
The Financial Statements on pages 53 to 73 were approved by the Board of Directors on 19 March 2025 and were signed on its behalf by:
Vivian Bazalgette
Chairman
The Notes on pages 56 to 73 form an integral part of these Financial Statements.
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Notes to the Financial Statements
1 Principal Activity
Fidelity European Trust PLC is an Investment Company incorporated in England and Wales that is listed on the London Stock Exchange.
The Company’s registration number is 2638812, and its registered office is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth,
Surrey KT20 6RP. The Company has been approved by HM Revenue & Customs as an Investment Trust under Section 1158 of the
Corporation Tax Act 2010 and intends to conduct its affairs so as to continue to be approved.
2 Accounting Policies
The Company has prepared its Financial Statements in accordance with UK Generally Accepted Accounting Practice (“UK GAAP”),
including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, issued by the Financial Reporting
Council (“FRC”). The Financial Statements have also been prepared in accordance with the Statement of Recommended Practice:
Financial Statements of Investment Trust Companies and Venture Capital Trusts (“SORP”) issued by the Association of Investment
Companies (“AIC”) in July 2022. The Company is exempt from presenting a Cash Flow Statement as a Statement of Changes in Equity
is presented and substantially all of the Company’s investments are highly liquid and are carried at market value.
(a) Basis of accounting
The Financial Statements have been prepared on a going concern basis and under the historical cost convention, except for
the measurement at fair value of investments and derivative instruments. The Directors have a reasonable expectation that the
Company has adequate resources to continue in operational existence up to 31 March 2026 which is at least twelve months from
the date of approval of these Financial Statements. In making their assessment the Directors have reviewed income and expense
projections, reviewed the liquidity of the investment portfolio and considered the Company’s ability to meet liabilities as they fall
due. This conclusion also takes into account the Director’s assessment of the risks faced by the Company and their consideration of
the upcoming continuation vote at the AGM on 8 May 2025, as detailed in the Going Concern Statement on page 32. The Directors
recommend that shareholders vote in favour of the continuation of the Company.
In preparing these Financial Statements the Directors have considered the impact of climate change risk as an emerging and
a principal risk as set out on page 23, and have concluded that there was no further impact of climate change to be taken into
account as the investments are valued based on market pricing. In line with FRS 102, investments are valued at fair value, which for
the Company are quoted bid prices for investments in active markets at the balance sheet date and therefore reflect the market
participants view of climate change risk on the investments held by the Company.
The Company’s Going Concern Statement in the Directors’ Report on page 32 takes account of all events and conditions up to
31 March 2026 which is at least twelve months from the date of approval of these Financial Statements.
b) Significant accounting estimates and judgements
The Directors make judgements and estimates concerning the future. Estimates and judgements are continually evaluated and are
based on historical experience and other factors, such as expectations of future events, and are believed to be reasonable under
the circumstances. Actual results may differ from these estimates. The Company’s Financial Statements contain no key sources of
estimation or uncertainty.
c) Segmental reporting
The Company is engaged in a single segment business and, therefore, no segmental reporting is provided.
d) Presentation of the Income Statement
In order to better reflect the activities of an investment company and in accordance with guidance issued by the AIC, supplementary
information which analyses the Income Statement between items of a revenue and capital nature has been prepared alongside
the Income Statement. The net revenue return/(loss) after taxation for the year is the measure the Directors believe appropriate in
assessing the Company’s compliance with certain requirements set out in Section 1159 of the Corporation Tax Act 2010.
e) Income
Income from equity investments is accounted for on the date on which the right to receive the payment is established, normally the
ex-dividend date. Overseas dividends are accounted for gross of any tax deducted at source. Amounts are credited to the revenue
column of the Income Statement. Where the Company has elected to receive its dividends in the form of additional shares rather than
cash, the amount of the cash dividend foregone is recognised in the revenue column of the Income Statement. Any excess in the value
of the shares received over the amount of the cash dividend is recognised in the capital column of the Income Statement. Special
dividends are treated as a revenue receipt or a capital receipt depending on the facts and circumstances of each particular case.
Derivative instrument income received from dividends on long contracts for difference (“CFDs”) is accounted for on the date on which
the right to receive the payment is established, normally the ex-dividend date. The amount net of tax is credited to the revenue column
of the Income Statement.
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Customer: Fidelity Project Title: FET Annual Report 2024 T: 0207 055 6500 F: 020 7055 6600
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Fidelity European Trust PLC
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
2 Accounting Policies continued
Interest received on CFDs, bank deposits, collateral and money market funds is accounted for on an accruals basis and credited to
the revenue column of the Income Statement. Interest received on CFDs represent the finance costs calculated by reference to the
notional value of the CFDs.
f) Investment management fees and other expenses
Investment management fees and other expenses are accounted for on an accruals basis and are charged as follows:
• The investment management fee is allocated 25% to revenue and 75% to capital in line with the Board’s expected long-term split
of revenue and capital return from the Company’s portfolio of investments; and
• All other expenses are allocated in full to revenue with the exception of those directly attributable to share issues or other capital
events.
g) Functional currency and foreign exchange
The functional and reporting currency of the Company is UK sterling, which is the currency of the primary economic environment in
which the Company operates. Transactions denominated in foreign currencies are reported in UK sterling at the rate of exchange
ruling at the date of the transaction. Assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the
Balance Sheet date. Foreign exchange gains and losses arising on translation are recognised in the Income Statement as a revenue
or a capital item depending on the nature of the underlying item to which they relate.
h) Finance costs
Finance costs comprises interest paid on collateral and bank deposits and finance costs paid on CFDs, which are accounted for on
an accruals basis. Finance costs are allocated 25% to revenue and 75% to capital in line with the Board’s expected long-term split of
revenue and capital return from the Company’s portfolio of investments.
i) Taxation
The taxation charge represents the sum of current taxation and deferred taxation.
Current taxation is taxation suffered at source on overseas income less amounts recoverable under taxation treaties. Taxation is
charged or credited to the revenue column of the Income Statement, except where it relates to items of a capital nature, in which case
it is charged or credited to the capital column of the Income Statement. Where expenses are allocated between revenue and capital
any tax relief in respect of the expenses is allocated between revenue and capital returns on the marginal basis using the Company’s
effective rate of corporation tax for the accounting period. The Company is an approved Investment Trust under Section 1158 of the
Corporation Tax Act 2010 and is not liable for UK taxation on capital gains.
Deferred taxation is the taxation expected to be payable or recoverable on timing differences between the treatment of certain items
for accounting purposes and their treatment for the purposes of computing taxable profits. Deferred taxation is based on tax rates that
have been enacted or substantively enacted when the taxation is expected to be payable or recoverable. Deferred tax assets are
only recognised if it is considered more likely than not that there will be sufficient future taxable profits to utilise them.
j) Dividend paid
Dividends payable to equity shareholders are recognised when the Company’s obligation to make payment is established.
k) Investments
The Company’s business is investing in financial instruments with a view to profiting from their total return in the form of income and
capital growth. This portfolio of investments is managed and its performance evaluated on a fair value basis, in accordance with a
documented investment strategy, and information about the portfolio is provided on that basis to the Company’s Board of Directors.
Investments are measured at fair value with changes in fair value recognised in profit or loss, in accordance with the provisions of both
Section 11 and Section 12 of FRS 102. The fair value of investments is initially taken to be their cost and is subsequently measured as
follows:
• Listed investments are valued at bid prices, or last market prices, depending on the convention of the exchange on which they
are listed.
In accordance with the AIC SORP, the Company includes transaction costs, incidental to the purchase or sale of investments, within
(losses)/gains on investments in the capital column of the Income Statement and has disclosed these costs in Note 10 on page 63.
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Notes to the Financial Statements continued
2 Accounting Policies continued
l) Derivative instruments
When appropriate, permitted transactions in derivative instruments are used. Derivative transactions into which the Company may
enter include long and short CFDs and futures. Derivatives are classified as other financial instruments and are initially accounted and
measured at fair value on the date the derivative contract is entered into and subsequently measured at fair value as follows:
• Long and short CFDs – the difference between the strike price and the value of the underlying shares in the contract; and
• Futures – the difference between the contract price and the quoted trade price.
Where transactions are used to protect or enhance income, if the circumstances support this, the income and expenses derived are
included in net income in the revenue column of the Income Statement. Where such transactions are used to protect or enhance
capital, if the circumstances support this, the income and expenses derived are included in gains/(losses) on derivative instruments
in the capital column of the Income Statement. Any positions on such transactions open at the year end are reflected on the Balance
Sheet at their fair value within current assets or current liabilities.
m) Debtors
Debtors include accrued income, taxation recoverable and other debtors and prepayments incurred in the ordinary course of business.
If collection is expected in one year or less (or in the normal operating cycle of the business, if longer) they are classified as current
assets. If not, they are presented as non-current assets. They are recognised initially at fair value and, where applicable, subsequently
measured at amortised cost using the effective interest rate method.
n) Amounts held at futures clearing houses and brokers
These are amounts held in segregated accounts on behalf of brokers as collateral against open derivative contracts. These are
carried at amortised cost.
o) Cash and cash equivalents
Cash and cash equivalents may comprise cash at bank and money market funds which are short-term, highly liquid and are readily
convertible to a known amount of cash. These are subject to an insignificant risk of changes in value.
p) Other creditors
Other creditors include investment management fees and other creditors and expenses accrued in the ordinary course of business.
If payment is due within one year or less (or in the normal operating cycle of the business, if longer) they are classified as current
liabilities. If not, they are presented as non-current liabilities. They are recognised initially at fair value and, where applicable,
subsequently measured at amortised cost using the effective interest rate method.
q) Capital reserve
The following are accounted for in the capital reserve:
• Gains and losses on the disposal of investments and derivative instruments;
• Changes in the fair value of investments and derivative instruments held at the year end;
• Foreign exchange gains and losses of a capital nature;
• 75% of investment management fees and finance costs;
• Dividends receivable which are capital in nature; and
• Cost of repurchasing shares.
Technical guidance issued by the Institute of Chartered Accountants in England and Wales in TECH 02/17BL, guidance on the
determination of realised profits and losses in the context of distributions under the Companies Act 2006, states that changes in
the fair value of investments which are readily convertible to cash, without accepting adverse terms at the Balance Sheet date, can
be treated as realised. Capital reserves realised and unrealised are shown in aggregate as capital reserve in the Statement of
Changes in Equity and the Balance Sheet. At the Balance Sheet date, the portfolio of the Company consisted of investments listed on
a recognised stock exchange and derivative instruments contracted with counterparties having an adequate credit rating, and the
portfolio was considered to be readily convertible to cash.
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
3 Income
Year ended
31.12.24
£’000
Year ended
31.12.23
£’000
Investment income
Overseas dividends 42,870 37,484
Overseas scrip dividends – 957
UK dividends 1,654 1,679
44,524 40,120
Derivative income
Income recognised from futures contracts 2,468 2,392
Dividends received on long CFDs 3,972 3,570
Interest received on CFDs 329 333
6,769 6,295
Investment and derivative income 51,293 46,415
Other income
Interest received on collateral, bank deposits and money market funds 2,323 798
Interest received on tax reclaims 54 8
2,377 806
Total income 53,670 47,221
Special dividends of £1,271,000 (2023: £710,000) have been recognised in capital.
4 Investment Management Fees
Year ended 31 December 2024 Year ended 31 December 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Investment management fees 2,878 8,634 11,512 2,625 7,877 10,502
FIL Investment Services (UK) Limited is the Company’s Alternative Investment Fund Manager and has delegated portfolio management
to FIL Investments International (“FII”). Both companies are Fidelity group companies.
FII charges investment management fees at an annual rate of 0.85% of net assets up to £400 million and 0.65% of net assets in excess
of £400 million. Fees are payable monthly in arrears and are calculated on a daily basis.
Investment management fees have been allocated 75% to capital reserve in accordance with the Company’s accounting policies.
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5 Other Expenses
Year ended
31.12.24
£’000
Year ended
31.12.23
£’000
AIC fees 24 21
Custody fees 90 81
Depositary fees 63 54
Directors’ fees
1
186 169
Legal and professional fees 120 94
Marketing expenses 221 260
Printing and publication expenses 191 127
Registrars’ fees 91 86
Fees payable to the Company’s Independent Auditor for the audit of the Financial Statements 50 48
Other expenses 27 27
1,063 967
1 Details of the breakdown of Directors’ fees are disclosed in the Directors’ Remuneration Report on page 41.
6 Finance Costs
Year ended 31 December 2024 Year ended 31 December 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Interest paid on collateral and bank
deposits 15 43 58 – – –
Interest paid on CFDs 2,122 6,367 8,489 1,601 4,803 6,404
Costs recognised from futures contracts 633 1,899 2,532 537 1,611 2,148
2,770 8,309 11,079 2,138 6,414 8,552
Finance costs have been allocated 75% to capital reserve in accordance with the Company’s accounting policies.
Notes to the Financial Statements continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
7 Taxation on Return/(Loss) on Ordinary Activities
Year ended 31 December 2024 Year ended 31 December 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
a) Analysis of the taxation charge for
the year
Overseas taxation 4,422 – 4,422 3,390 – 3,390
Taxation charge for the year
(see Note 7b) 4,422 – 4,422 3,390 – 3,390
b) Factors affecting the taxation charge for the year
The taxation charge for the year is lower than the standard rate of UK corporation tax for an investment trust company of 25.00%
(2023: 25.00%). A reconciliation of the standard rate of UK corporation tax to the taxation charge for the year is shown below:
Year ended 31 December 2024 Year ended 31 December 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Net return/(loss) on ordinary activities
before taxation 46,959 (31,777) 15,182 41,491 200,591 242,082
Net return/(loss) on ordinary activities
before taxation multiplied by the standard
rate of UK corporation tax of 25.00% (2023:
blended rate of 23.52%) 11,740 (7,944) 3,796 9,758 47,179 56,937
Effects of:
Capital losses/(gains) not taxable
1
– 3,709 3,709 – (50,540) (50,540)
Income not taxable (11,131) – (11,131) (9,436) – (9,436)
Expenses not deductible – 2,077 2,077 – 1,509 1,509
Excess management expenses (609) 2,158 1,549 (322) 1,852 1,530
Overseas taxation 4,422 – 4,422 3,390 – 3,390
Total taxation charge for the year (see
Note 7a) 4,422 – 4,422 3,390 – 3,390
1 The Company is exempt from UK taxation on capital gains as it meets the HM Revenue & Customs criteria for an investment company set out in Section 1159 of the
Corporation Tax Act 2010.
c) Deferred taxation
A deferred tax asset of £18,676,000 (2023: £17,127,000), in respect of excess expenses of £69,202,000 (2023: £63,004,000) and excess
loan interest of £5,505,000 (2023: £5,505,000), has not been recognised as it is unlikely that there will be sufficient future taxable profits
to utilise these expenses.
The UK corporation tax rate increased from 19.00% to 25.00% from 1 April 2023. The rate of 25.00% has been applied to calculate the
unrecognised deferred tax asset for the current year (2023: 25.00%).
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8 Return/(Loss) per Ordinary Share
Year ended
31.12.24
Year ended
31.12.23
Revenue return per ordinary share 10.41p 9.32p
Capital (loss)/return per ordinary share (7.78p) 49.08p
Total return per ordinary share 2.63p 58.40p
The return/(loss) per ordinary share is based on the net return/(loss) on ordinary activities after taxation for the year divided by the
weighted average number of ordinary shares held outside of Treasury during the year, as shown below:
£’000 £’000
Net revenue return on ordinary activities after taxation 42,537 38,101
Net capital (loss)/return on ordinary activities after taxation (31,777) 200,591
Total return on ordinary activities after taxation 10,760 238,692
Number Number
Weighted average number of ordinary shares held outside of Treasury 408,730,523 408,730,523
9 Dividends Paid to Shareholders
Year ended
31.12.24
£’000
Year ended
31.12.23
£’000
Dividends paid
Interim dividend of 3.60 pence per ordinary share paid for the year ended 31 December 2024 14,714 –
Final dividend of 4.99 pence per ordinary share paid for the year ended 31 December 2023 20,396 –
Interim dividend of 3.26 pence per ordinary share paid for the year ended 31 December 2023 – 13,325
Final dividend of 4.62 pence per ordinary share paid for the year ended 31 December 2022 – 18,883
35,110 32,208
Dividends proposed
Final dividend of 5.50 pence per ordinary share proposed for the year ended 31 December 2024 22,480 –
Final dividend of 4.99 pence per ordinary share proposed for the year ended 31 December 2023 – 20,396
Total dividend proposed 22,480 20,396
The Directors have proposed the payment of a final dividend for the year ended 31 December 2024 of 5.50 pence per ordinary share
which is subject to approval by shareholders at the Annual General Meeting on 8 May 2025 and has not been included as a liability
in these Financial Statements. The dividend will be paid on 13 May 2025 to shareholders on the register at the close of business on
28 March 2025 (ex-dividend date 27 March 2025).
Notes to the Financial Statements continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
10 Investments
2024
£’000
2023
£’000
Investments held at fair value 1,487,772 1,518,875
Opening book cost 943,460 872,694
Opening investment holding gains 575,415 452,695
Opening fair value 1,518,875 1,325,389
Movements in the year
Purchases at cost 185,382 275,931
Sales – proceeds (169,184) (248,350)
(Losses)/gains on investments (47,301) 165,905
Closing fair value 1,487,772 1,518,875
Closing book cost 1,005,206 943,460
Closing investment holding gains 482,566 575,415
Closing fair value 1,487,772 1,518,875
The Company received £169,184,000 (2023: £248,350,000) from investments sold in the year. The book cost of these investments when
they were purchased was £123,636,000 (2023: £205,165,000). These investments have been revalued over time and until they were
sold any unrealised gains/losses were included in the fair value of the investments.
Investment transaction costs
Transaction costs incurred in the acquisition and disposal of investments, which are included in the (losses)/gains on investments
above, were as follows:
Year ended
31.12.24
£’000
Year ended
31.12.23
£’000
Purchases transaction costs 488 286
Sales transaction costs 70 121
558 407
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11 Derivative Instruments
Year ended
31.12.24
£’000
Year ended
31.12.23
£’000
Gains/(losses) on derivative instruments
Gains on long CFD positions closed 41,187 32,223
(Losses)/gains on short CFD positions closed (8,418) 2,257
Gains on futures contracts closed 5,815 9,484
Movement in investment holding (losses)/gains on long CFDs (2,246) 4,229
Movement in investment holding (losses)/gains on short CFDs (142) 142
Movement in investment holding (losses)/gains on futures (773) 2,106
35,423 50,441
2024
Fair value
£’000
2023
Fair value
£’000
Derivative instruments recognised on the Balance Sheet
Derivative instrument assets – 886
Derivative instrument liabilities (5,796) (3,521)
(5,796) (2,635)
Fair value
£’000
2024
Asset
exposure
£’000
Fair value
£’000
2023
Asset
exposure
£’000
At the year end the Company held the following derivative
instruments
Long CFDs (4,675) 196,659 (2,429) 199,945
Short CFDs – – 142 12,736
Long futures (1,121) 54,743 (348) 64,492
(5,796) 251,402 (2,635) 277,173
Notes to the Financial Statements continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
12 Debtors
2024
£’000
2023
£’000
Accrued income 618 933
Taxation recoverable 8,807 10,393
Other debtors and prepayments 81 123
9,506 11,449
13 Other Creditors
2024
£’000
2023
£’000
Creditors and accruals 1,473 1,398
14 Share Capital
2024 2023
Number of
shares
Nominal
value
£’000
Number of
shares
Nominal
value
£’000
Issued, allotted and fully paid
Ordinary shares of 2.5 pence each held outside of Treasury
Beginning of the year 408,730,523 10,218 408,730,523 10,218
Ordinary shares repurchased into Treasury – – – –
End of the year 408,730,523 10,218 408,730,523 10,218
Ordinary shares of 2.5 pence each held in Treasury
1
Beginning of the year 7,717,387 193 7,717,387 193
Ordinary shares repurchased into Treasury – – – –
End of the year 7,717,387 193 7,717,387 193
Total share capital 10,411 10,411
1 Ordinary shares held in Treasury carry no rights to vote, to receive a dividend or to participate in a winding up of the Company.
No ordinary shares were repurchased into Treasury during the year (2023: nil).
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15 Capital and Reserves
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
shareholders’
funds
£’000
At 1 January 2024 10,411 58,615 5,414 1,472,587 40,452 1,587,479
Losses on investments (see Note 10) – – – (47,301) – (47,301)
Gains on derivative instruments
(see Note 11) – – – 35,423 – 35,423
Foreign exchange losses – – – (2,956) – (2,956)
Investment management fees (see Note 4) – – – (8,634) – (8,634)
Finance costs (see Note 6) – – – (8,309) – (8,309)
Revenue return on ordinary activities after
taxation for the year – – – – 42,537 42,537
Dividends paid to shareholders (see Note 9) – – – – (35,110) (35,110)
At 31 December 2024 10,411 58,615 5,414 1,440,810 47,879 1,563,129
At 1 January 2023 10,411 58,615 5,414 1,271,996 34,559 1,380,995
Gains on investments (see Note 10) – – – 165,905 – 165,905
Gains on derivative instruments
(see Note 11) – – – 50,441 – 50,441
Foreign exchange losses – – – (1,464) – (1,464)
Investment management fees (see Note 4) – – – (7,877) – (7,877)
Finance costs (see Note 6) – – – (6,414) – (6,414)
Revenue return on ordinary activities after
taxation for the year – – – – 38,101 38,101
Dividends paid to shareholders (see Note 9) – – – – (32,208) (32,208)
At 31 December 2023 10,411 58,615 5,414 1,472,587 40,452 1,587,479
The capital reserve balance at 31 December 2024 includes investment holding gains of £482,566,000 (2023: gains of £575,415,000)
as detailed in Note 10. See Note 2 (q) for further details. The revenue and capital reserves are distributable by way of dividends.
Notes to the Financial Statements continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
16 Net Asset Value per Ordinary Share
The calculation of the net asset value per ordinary share is based on the total shareholders’ funds divided by the number of ordinary
shares held outside of Treasury.
2024 2023
Total shareholders’ funds £1,563,129,000 £1,587,479,000
Ordinary shares held outside of Treasury at year end 408,730,523 408,730,523
Net asset value per ordinary share 382.44p 388.39p
It is the Company’s policy that shares held in Treasury will only be reissued at net asset value per ordinary share or at a premium to
net asset value per ordinary share and, therefore, shares held in Treasury have no dilutive effect.
17 Financial Instruments
Management of risk
The Company’s investing activities in pursuit of its investment objective involve certain inherent risks. The Board confirms that there
is an ongoing process for identifying, evaluating and managing the risks faced by the Company. The Board with the assistance
of the Manager, has developed a risk matrix which, as part of the internal control process, identifies the risks that the Company
faces. Principal risks identified are: geopolitical, economic and market; investment performance (including the use of gearing and
derivatives); legislation, taxation and regulatory; marketplace threats and competition; cybercrime and information security; business
continuity; key person and operational support; discount control; and environmental, social and governance (“ESG”). Risks are
identified and graded in this process, together with steps taken in mitigation, and are updated and reviewed on an ongoing basis.
These risks and how they are identified, evaluated and managed are shown in the Strategic Report on pages 23 to 27.
This note refers to the identification, measurement and management of risks potentially affecting the value of financial instruments.
The Company’s financial instruments may comprise:
• Equity shares held in accordance with the Company’s investment objective and policies;
• Derivative instruments which comprise CFDs and futures on equity indices; and
• Cash, liquid resources and short-term debtors and creditors that arise from its operations.
The risks identified arising from the Company’s financial instruments are market price risk (which comprises interest rate risk, foreign
currency risk and other price risk), liquidity risk, counterparty risk, credit risk and derivative instrument risk. The Board reviews and
agrees policies for managing each of these risks, which are summarised below. These policies are consistent with those followed last
year.
Market price risk
Interest rate risk
The Company finances its operations through its share capital and reserves. In addition, the Company has gearing through the use of
derivative instruments. The level of gearing is reviewed by the Board and the Lead Portfolio Manager. The Company is exposed to a
financial risk arising as a result of any increases in interest rates associated with the funding of the derivative instruments.
Interest rate risk exposure
The values of the Company’s financial instruments that are exposed to movements in interest rates are shown below:
2024
£’000
2023
£’000
Exposure to financial instruments that bear interest
Long CFDs – exposure less fair value 201,334 202,374
Exposure to financial instruments that earn interest
Short CFDs – exposure plus fair value – 12,878
Amounts held at futures clearing houses and brokers 10,078 8,384
Cash and cash equivalents 63,042 52,804
73,120 74,066
Net exposure to financial instruments that bear interest 128,214 128,308
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17 Financial Instruments continued
Foreign currency risk
The Company’s net return/(loss) on ordinary activities after taxation for the year and its net assets can be affected by foreign exchange
rate movements because the Company has income, assets and liabilities which are denominated in currencies other than the Company’s
functional currency which is UK sterling. The Company can also be subject to short-term exposure from exchange rate movements, for
example, between the date when an investment is purchased or sold and the date when settlement of the transaction occurs.
Three principal areas have been identified where foreign currency risk could impact the Company:
• Movements in exchange rates affecting the value of investments and derivative instruments;
• Movements in exchange rates affecting short-term timing differences; and
• Movements in exchange rates affecting income received.
Currency exposure of financial assets
The currency exposure profile of the Company’s financial assets is shown below:
2024
Currency
Investments
held at
fair value
£’000
Long
exposure
to derivative
instruments
£’000
Debtors
1
£’000
Cash and
cash
equivalents
2
£’000
Total
£’000
Euro 917,732 213,759 4,309 63,042 1,198,842
Swiss franc 295,505 – 3,752 – 299,257
Danish krone 85,263 – 341 – 85,604
Swedish krona 92,286 – – – 92,286
US dollar – 37,643 – – 37,643
Norwegian krone 25,629 – – – 25,629
UK sterling 71,357 – 11,182 – 82,539
1,487,772 251,402 19,584 63,042 1,821,800
1 Debtors include amounts held at futures clearing houses and brokers.
2 Cash and cash equivalent are made up of £3,460,000 cash at bank and £59,582,000 held in Fidelity Institutional Liquidity Fund.
2023
Currency
Investments
held at
fair value
£’000
Long
exposure
to derivative
instruments
£’000
Debtors
1
£’000
Cash and
cash
equivalents
2
£’000
Total
£’000
Euro
877,629 228,019 6,389 52,691 1,164,728
Swiss franc
357,739 – 3,947 – 361,686
Danish krone
96,102 – 465 – 96,567
Swedish krona
93,135 – – – 93,135
US dollar
– 36,418 – 113 36,531
Norwegian krone
25,052 – – – 25,052
UK sterling
69,218 – 9,032 – 78,250
1,518,875 264,437 19,833 52,804 1,855,949
1 Debtors include amounts held at futures clearing houses and brokers.
2 Cash and cash equivalent are made up of £3,900,000 cash at bank and £48,904,000 held in Fidelity Institutional Liquidity Fund.
Notes to the Financial Statements continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
17 Financial Instruments continued
Currency exposure of financial liabilities
The currency profile of the Company’s financial liabilities is shown below:
Currency
Short
exposure
to derivative
instruments
£’000
Other
creditors
£’000
2024
Total
£’000
Euro – 200 200
US dollar – 78 78
UK sterling – 1,195 1,195
– 1,473 1,473
Currency
Short
exposure
to derivative
instruments
£’000
Other
creditors
£’000
2023
Total
£’000
Euro 12,736 245 12,981
US dollar – 48 48
UK sterling – 1,105 1,105
12,736 1,398 14,134
Other price risk
Other price risk arises mainly from uncertainty about future prices of financial instruments used in the Company’s business. It
represents the potential loss the Company might suffer through holding market positions in the face of price movements. The Board
meets quarterly to consider the asset allocation of the portfolio and the risk associated with particular industry sectors within the
parameters of the investment objective. The Portfolio Managers are responsible for actively monitoring the existing portfolio selected
in accordance with the overall asset allocation parameters described above and seek to ensure that individual stocks also meet an
acceptable risk/reward profile.
Liquidity risk
Due to the closed-ended nature of the Company, the liquidity risk is limited. Liquidity risk is the risk that the Company will encounter
difficulties in meeting obligations associated with financial liabilities. The Company’s assets mainly comprise readily realisable
securities and derivative instruments which can be sold easily to meet funding commitments if necessary. Short-term flexibility is
achieved by the use of a bank overdraft, if required.
Liquidity risk exposure
At 31 December 2024, the undiscounted gross cash outflows of the financial liabilities were all repayable within one year and
consisted of derivative instrument liabilities of £5,796,000 (2023: £3,521,000) and creditors of £1,473,000 (2023: £1,398,000).
Counterparty risk
Certain derivative instruments in which the Company invests are not traded on an exchange but instead will be traded between
counterparties based on contractual relationships, under the terms outlined in the International Swaps and Derivatives Association’s
(“ISDA”) market standard derivative legal documentation. These are known as Over The Counter (“OTC”) trades. As a result, the
Company is subject to the risk that a counterparty may not perform its obligations under the related contract. In accordance with the
risk management process which the Manager employs, this risk is minimised by only entering into transactions with counterparties
which are believed to have an adequate credit rating at the time the transaction is entered into, by ensuring that formal legal
agreements covering the terms of the contract are entered into in advance, and through adopting a counterparty risk framework
which measures, monitors and manages counterparty risk by the use of internal and external credit agency ratings and by evaluating
derivative instrument credit risk exposure.
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17 Financial Instruments continued
31 December 2024 31 December 2023
Collateral
received
£’000
Collateral
pledged
£’000
Collateral
received
£’000
Collateral
pledged
£’000
Goldman Sachs International Ltd – – – 810
J.P. Morgan Securities plc – 5,025 – 2,460
UBS AG 50 5,053 60 5,114
50 10,078 60 8,384
Credit risk
Financial instruments may be adversely affected if any of the institutions with which money is deposited suffer insolvency or other financial
difficulties. All transactions are carried out with brokers that have been approved by the Manager and are settled on a delivery versus
payment basis. Limits are set on the amount that may be due from any one broker and are kept under review by the Manager. Exposure
to credit risk arises on unsettled security transactions and derivative instrument contracts and cash at bank.
Derivative instrument risk
The risks and risk management processes which result from the use of derivative instruments, are set out in a documented Risk
Management Process Document. Derivative instruments are used by the Manager for the following purposes:
• to gain unfunded long exposure to equity markets, sectors or single stocks. Unfunded exposure is exposure gained without an initial
flow of capital; and
• to position short exposures in the Company’s portfolio. These uncovered exposures benefit from falls in the prices of shares which the
Portfolio Managers believe to be overvalued. These positions, therefore, distinguish themselves from other short exposures held for
hedging purposes since they are expected to add risk to the portfolio.
RISK SENSITIVITY ANALYSIS
Interest rate risk sensitivity analysis
Based on the financial instruments held and interest rates at 31 December 2024, an increase of 1.00% in interest rates throughout the
year, with all other variables held constant, would have decreased the net return on ordinary activities after taxation for the year and
decreased the net assets of the Company by £1,282,000 (2023: decreased the net return and decreased the net assets by £1,283,000). A
decrease of 1.00% in interest rates throughout the year would have had an equal but opposite effect.
Foreign currency risk sensitivity analysis
Based on the financial instruments held and currency exchange rates at the Balance Sheet date, a 10% strengthening of the UK sterling
exchange rate against foreign currencies, with all other variables held constant, would have decreased the Company’s net return on
ordinary activities after taxation for the year and decreased the Company’s net assets (2023: decreased the net return and decreased
the net assets) by the following amounts:
Currency
2024
£’000
2023
£’000
Euro 108,967 104,704
Swiss franc 27,205 32,881
Swedish krona 8,390 8,467
Danish krone 7,782 8,779
US dollar 3,415 3,317
Norwegian krone 2,330 2,277
158,089 160,425
Notes to the Financial Statements continued
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17 Financial Instruments continued
Based on the financial instruments held and currency exchange rates at the Balance Sheet date, a 10% weakening of the UK sterling
exchange rate against foreign currencies, with all other variables held constant, would have increased the Company’s net return on
ordinary activities after taxation for the year and increased the Company’s net assets (2023: increased the net return and increased
the net assets) by the following amounts:
Currency
2024
£’000
2023
£’000
Euro 133,182 127,972
Swiss franc 33,251 40,187
Swedish krona 10,254 10,348
Danish krone 9,512 10,730
US dollar 4,174 4,054
Norwegian krone 2,848 2,784
193,221 196,075
Other price risk – exposure to investments sensitivity analysis
Based on the investments held and share prices at 31 December 2024, an increase of 10% in share prices, with all other variables
held constant, would have increased the Company’s net return on ordinary activities after taxation for the year and increased the net
assets of the Company by £148,777,000 (2023: increased the net return and increased the net assets by £151,888,000). A decrease of
10% in share prices would have had an equal and opposite effect.
Other price risk – net exposure to derivative instruments sensitivity analysis
Based on the derivative instruments held and share prices at 31 December 2024, an increase of 10% in the share prices underlying
the derivative instruments, with all other variables held constant, would have increased the Company’s net return on ordinary activities
after taxation for the year and increased the net assets of the Company by £25,140,000 (2023: increased the net return and increased
the net assets by £25,170,000). A decrease of 10% in share prices of the investments underlying the derivative instruments would have
had an equal and opposite effect.
Fair Value of Financial Assets and Liabilities
Financial assets and liabilities are stated in the Balance Sheet at values which are not materially different to their fair values. As
explained in Notes 2 (k) and (l), investments and derivative instruments are shown at fair value. In the case of cash and cash
equivalents, book value approximates to fair value due to the short maturity of the instruments.
Fair Value Hierarchy
The Company is required to disclose the fair value hierarchy that classifies its financial instruments measured at fair value at one of
three levels, according to the relative reliability of the inputs used to estimate the fair values.
Classification Input
Level 1
Valued using quoted prices in active markets for identical assets
Level 2
Valued by reference to inputs other than quoted prices included in level 1 that are observable
(i.e. developed using market data) for the asset or liability, either directly or indirectly
Level 3
Valued by reference to valuation techniques using inputs that are not based on observable
market data
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17 Financial Instruments continued
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value
measurement of the relevant asset. The valuation techniques used by the Company are explained in Notes 2 (k) and (l). The table
below sets out the Company’s fair value hierarchy.
Financial assets at fair value through profit or loss
Level 1
£’000
Level 2
£’000
Level 3
£’000
2024
Total
£’000
Investments 1,487,772 – – 1,487,772
Derivative instrument assets – – – –
1,487,772 – – 1,487,772
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities (1,121) (4,675) – (5,796)
Financial assets at fair value through profit or loss
Level 1
£’000
Level 2
£’000
Level 3
£’000
2023
Total
£’000
Investments 1,518,875 – – 1,518,875
Derivative instrument assets – 886 – 886
1,518,875 886 – 1,519,761
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities (348) (3,173) – (3,521)
18 Capital Resources and Gearing
The Company does not have any externally imposed capital requirements. The financial resources of the Company comprise its share
capital and reserves, as disclosed in the Balance Sheet on page 55, and any gearing, which is managed by the use of derivative
instruments. Financial resources are managed in accordance with the Company’s investment policy and in pursuit of its investment
objective, both of which are detailed in the Strategic Report on page 21. The principal risks and their management are disclosed in
the Strategic Report on pages 23 to 27 and in Note 17.
The Company’s gross gearing and net gearing at the year end is set out below:
2024
Gross gearing Net gearing
Asset
exposure
£’000 %
1
Asset
exposure
£’000 %
1
Investments 1,487,772 95.2 1,487,772 95.2
Long CFDs 196,659 12.6 196,659 12.6
Long futures 54,743 3.5 54,743 3.5
Total long exposures 1,739,174 111.3 1,739,174 111.3
Short CFDs – – – –
Gross asset exposure/net market exposure 1,739,174 111.3 1,739,174 111.3
Shareholders’ funds 1,563,129 1,563,129
Gearing
2
11.3 11.3
1 Asset exposure to the market expressed as a percentage of shareholders’ funds.
2 Gearing is the amount by which gross asset exposure/net market exposure exceeds shareholders’ funds expressed as a percentage of shareholders’ funds.
Notes to the Financial Statements continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
18 Capital Resources and Gearing continued
2023
Gross gearing Net gearing
Asset
exposure
£’000 %
1
Asset
exposure
£’000 %
1
Investments 1,518,875 95.6 1,518,875 95.6
Long CFDs 199,945 12.6 199,945 12.6
Long futures 64,492 4.1 64,492 4.1
Total long exposures 1,783,312 112.3 1,783,312 112.3
Short CFDs 12,736 0.8 (12,736) (0.8)
Gross asset exposure/net market exposure 1,796,048 113.1 1,770,576 111.5
Shareholders’ funds 1,587,479 1,587,479
Gearing
2
13.1 11.5
1 Asset exposure to the market expressed as a percentage of shareholders’ funds.
2 Gearing is the amount by which gross asset exposure/net market exposure exceeds shareholders’ funds expressed as a percentage of shareholders’ funds.
19 Transactions with the Managers and Related Parties
FIL Investment Services (UK) Limited is the Company’s Alternative Investment Fund Manager and has delegated portfolio management
and the role of company secretary to FIL Investments International (“FII”). Both companies are Fidelity group companies.
Details of the current fee arrangements are given in the Directors’ Report on page 32 and in Note 4. During the year, fees for
portfolio management services of £11,512,000 (2023: £10,502,000) were payable to FII. At the Balance Sheet date, fees for portfolio
management services of £972,000 (2023: £925,000) were accrued and included in other creditors. FII also provides the Company with
marketing services. The total amount payable for these services during the year was £221,000 (2023: £260,000). At the Balance Sheet
date, marketing services of £53,000 (2023: £14,000) were accrued and included in other creditors.
Disclosures of the Directors’ interests in the ordinary shares of the Company and Directors’ fees and taxable expenses relating to
reasonable travel expenses paid to the Directors are given in the Directors’ Remuneration Report on pages 41 and 42. In addition
to the fees and taxable expenses disclosed in the Directors’ Remuneration Report, £20,000 (2023: £17,000) of Employers’ National
Insurance Contributions was also paid by the Company. As at 31 December 2024, Directors’ fees of £22,000 (2023: £14,000) were
accrued and payable.
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The Company uses the following as Alternative Performance Measures and these are all defined in the Glossary of Terms on pages
84 to 86.
Discount/Premium
The discount/premium is the difference between the net asset value (“NAV”) per ordinary share of the Company and the ordinary
share price and is expressed as a percentage of the NAV per ordinary share. Details of the Company’s discount are on the Financial
Highlights page.
Gearing
See Note 18 on pages 72 and 73 for details of the Company’s gearing (both gross and net).
Net Asset Value (“NAV”) per Ordinary Share
See the Balance Sheet on page 55 and Note 16 on page 67 for further details of the Company’s NAV per ordinary share.
Ongoing Charges Ratio
The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of management fees and
other expenses expressed as a percentage of the average net assets throughout the year.
2024 2023
Investment management fees (£’000) 11,512 10,502
Other expenses (£’000) 1,063 967
Ongoing charges (£’000) 12,575 11,469
Ongoing charges ratio 0.76% 0.77%
Revenue, Capital and Total Returns per Share
See the Income Statement on page 53 and Note 8 on page 62 for further details on the revenue, capital and total returns per ordinary
share.
Total Return Performance
The NAV per ordinary share total return performance includes reinvestment of the dividend in the NAV of the Company on the ex-
dividend date. The ordinary share price total return performance includes the reinvestment of the net dividend in the month that the
share price goes ex-dividend.
The tables below provide information relating to the NAV per ordinary share and the ordinary share price of the Company, the impact
of the dividend reinvestments and the total returns for the years ended 31 December 2024 and 31 December 2023.
2024
Net asset
value per
ordinary
share
Ordinary
share
price
31 December 2023 388.39p 360.00p
31 December 2024 382.44p 352.00p
Change in year -1.5% -2.2%
Impact of dividend reinvestments +2.0% +2.1%
Total return for the year +0.5% -0.1%
Alternative Performance Measures
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
2023
Net asset
value per
ordinary
share
Ordinary
share
price
31 December 2022 337.87p 319.50p
31 December 2023 388.39p 360.00p
Change in year +15.0% +12.7%
Impact of dividend reinvestments +2.5% +2.6%
Total return for the year +17.5% +15.3%
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Financial Calendar
The key dates in the Company’s calendar are:
31 December 2024 – Financial Year End
March 2025 – Announcement of the annual results for the year to 31 December 2024
March 2025 – Publication of this Report
27 March 2025 – Ex-Dividend date
28 March 2025 – Dividend Record date
8 May 2025 – Annual General Meeting
13 May 2025 – Payment of Final Dividend
30 June 2024 – Half-Year End
September 2025 – Announcement of the Half-Yearly results for the six months to 30 June 2024
September 2025 – Publication of the Half-Yearly Report
September 2025 – Ex-Dividend and Record dates
November 2025 – Payment of Interim Dividend
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
Notice is hereby given that the Annual General Meeting of
Fidelity European Trust PLC will be held at 4 Cannon Street,
London EC4M 5AB and virtually via the Lumi AGM meeting
platform on Thursday, 8 May 2025 at 11.00 am for the
following purposes:
1. To receive and adopt the Annual Report and Financial
Statements for the year ended 31 December 2024.
2. To declare that a final dividend for the year ended
31December 2024 of 5.50 pence per ordinary share be
paid to shareholders on the register as at close of business
on 28March 2025.
3. To re-elect Ms Fleur Meijs as a Director.
4. To re-elect Ms Milyae Park as a Director.
5. To re-elect Sir Ivan Rogers as a Director.
6. To elect Mrs Davina Walter as a Director.
7. To re-elect Mr Paul Yates as a Director.
8. To approve the Directors’ Remuneration Report (excluding
the section headed “The Remuneration Policy” set out on
page 40) for the year ended 31 December 2024.
9. To reappoint Ernst & Young LLP as Auditor of the Company to
hold office until the conclusion of the next general meeting at
which financial statements are laid before the Company.
10. To authorise the Directors to determine the Auditor’s
remuneration.
To consider and, if thought fit, to pass the following special
business resolutions of which Resolutions 11 and 14 will be
proposed as ordinary resolutions and Resolutions 12, 13 and 15
as special resolutions.
Authority to Allot Ordinary Shares and Disapply Pre-Emption
Rights
Resolution 11 (ordinary) and Resolution 12 (special) will, if
approved, authorise the Directors to allot a limited number
of ordinary shares (or to sell any ordinary shares which the
Company elects to hold in Treasury) for cash without first offering
such shares to existing ordinary shareholders pro rata to their
existing holdings. The limit set by the Board is 5% of the number
of ordinary shares of the Company (including Treasury shares)
in issue on 19 March 2025. The Directors will only issue new
ordinary shares, or dispose of ordinary shares held in Treasury,
under this authority to take advantage of opportunities in the
market as they arise and only if they believe it is advantageous
to the Company’s shareholders to do so. Any ordinary shares
held in Treasury would be re-issued at net asset value (“NAV”)
per ordinary share or at a premium to NAV per ordinary share.
This would ensure that the net effect of repurchasing and then
re-issuing the ordinary shares would enhance NAV per ordinary
share.
11. THAT the Directors be and they are hereby generally and
unconditionally authorised in accordance with Section 551
of the Companies Act 2006 (the “Act”) to exercise all the
powers of the Company to allot shares in the Company or
to grant rights to subscribe for or to convert any securities
into shares in the Company (“relevant securities”) up to an
aggregate nominal amount of £520,559 (approximately 5%
of the aggregate nominal amount of the issued share capital
of the Company (including Treasury shares) as at 19 March
2025) and so that the Directors may impose any limits or
restrictions and make any arrangements which they consider
necessary or appropriate to deal with Treasury shares,
fractional entitlements, record dates, legal, regulatory or
practical problems in, or under the laws of, any territory or
any other matter, such authority to expire at the conclusion of
the next Annual General Meeting (“AGM”) of the Company
or the date 15 months after the passing of this resolution,
whichever is the earlier, but so that this authority shall allow
the Company to make offers or agreements before the
expiry of this authority which would or might require relevant
securities to be allotted after such expiry as if the authority
conferred by this resolution had not expired. All previous
unexpired authorities are revoked, but without prejudice to
any allotment of shares or grant of rights already made,
offered or agreed to be made pursuant to such authorities.
12. THAT, subject to the passing of Resolution 11, as set out
above, the Directors be and they are hereby authorised,
pursuant to Sections 570-573 of the Act to allot equity
securities (as defined in Section 560 of the Act) for cash
pursuant to the authority given by the said Resolution 11
and/or to sell ordinary shares held by the Company as
Treasury shares for cash, as if Section 561 of the Act did not
apply to any such allotment or sale, provided that this power
shall be limited:
a) to the allotment of equity securities or sale of Treasury
shares up to an aggregate nominal amount of £520,559
(approximately 5% of the aggregate nominal amount
of the issued share capital of the Company (including
Treasury shares) as at 19 March 2025); and
b) by the condition that allotments of equity securities or
sales of Treasury shares may only be made pursuant
to this authority at a price of not less than the NAV per
ordinary share,
and this power shall expire at the conclusion of the next
AGM of the Company or the date 15 months after the
passing of this Resolution, whichever is the earlier, save
that this authority shall allow the Company to make offers
or agreements before the expiry of this authority, and the
Directors may allot equity securities in relation to such an
offer or agreement as if the authority conferred by this
Resolution had not expired.
Authority to Repurchase Ordinary Shares
Resolution 13 is a special resolution which, if approved, will
renew the Company’s authority to purchase up to 14.99% of the
number of ordinary shares in issue (excluding Treasury shares) on
19 March 2025, either for immediate cancellation or for retention
as Treasury shares, at the determination of the Board. Once
Notice of Meeting
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Notice of Meeting continued
shares are held in Treasury, the Directors may only dispose of
them in accordance with the relevant legislation by subsequently
selling the shares for cash or cancelling the shares. Purchases of
ordinary shares will be made at the discretion of the Directors
and within guidelines set by them from time to time in the light of
prevailing market conditions. Purchases will only be made in the
market at prices below the prevailing NAV per ordinary share,
thereby resulting in an increased NAV per ordinary share.
13. THAT the Company be and is hereby generally and
unconditionally authorised in accordance with Section 701
of the Companies Act 2006 (the “Act”) to make market
purchases (within the meaning of Section 693 of the Act)
of ordinary shares of 2.5 pence each (the “shares”) in the
capital of the Company provided that:
a) the maximum number of shares hereby authorised to be
purchased shall be 61,628,680;
b) the minimum price which may be paid for an ordinary
share is 2.5 pence;
c) the maximum price (excluding expenses) which may be
paid for each share is the higher of:
(i) 5% above the average of the middle market
quotations for the shares as derived from the
London Stock Exchange Official List for the five
business days immediately preceding the date of
purchase; and
(ii) the higher of the price of the last independent
trade and the highest current independent
purchase bid on the London Stock Exchange at the
time the purchase is carried out;
d) the authority hereby conferred shall expire at the
conclusion of the next AGM of the Company or the date
15 months after the passing of this resolution, whichever
is earlier, unless such authority is renewed prior to such
time; and
e) the Company may make a contract to purchase shares
under the authority hereby conferred prior to the expiry
of such authority which will or may be executed wholly
or partly after the expiration of such authority and
may make a purchase of shares pursuant to any such
contract.
Continuation of the Company
Resolution 14 is an ordinary resolution that relates to the
continuation of the Company.
14. T HAT the Company continues to carry on business as an
investment trust.
Adoption of New Articles of Association
Resolution 15 is special resolution that relates to the adoption of
new Articles of Association by the Company in relation to Directors’
fees and other clarificatory, administrative and technical changes,
as described further in the Directors’ Report on page 35.
15. THAT with effect from the passing of this resolution, the draft
Articles of Association produced to the meeting and, for
the purpose of identification, initialled by the Chairman, be
adopted as the Articles of Association of the Company in
substitution for, and to the exclusion of, the existing Articles of
Association of the Company.
By Order of the Board
FIL Investments International
Secretary
19 March 2025
Notes to the Notice of Meeting:
1. A member of the Company entitled to attend and vote at
the Annual General Meeting may appoint a proxy or proxies
to attend and to speak and vote instead of him. A member
may appoint more than one proxy in relation to the Annual
General Meeting provided that each proxy is appointed to
exercise the rights attached to a different share or shares
held by that member. A proxy need not be a member of
the Company. To appoint a proxy via the Investor Centre at
uk.investorcentre.mpms.mufg.com/Login, you will need
to log in to your Investor Centre account or register if you
have not previously done so. To register you will need your
Investor Code which can be found on your Form of Proxy.
2. A Form of Proxy is enclosed and must be returned to the
Registrar at the address on the form to arrive not later than
11.00 am on Tuesday, 6 May 2025. Completion and return
of the form of proxy will not prevent a shareholder from
subsequently attending the meeting and voting in person if
they so wish.
3. To be effective, the instrument appointing a proxy, and
any power of attorney or other authority under which it is
signed (or a copy of any such authority certified notarially
or in some other way approved by the Directors), must
be deposited with the Company’s Registrar, PXS 1, MUFG
Corporate Markets, Central Square, 29 Wellington Street,
Leeds LS1 4DL not less than 48 hours before the time for
holding the meeting or adjourned meeting or, in the case of
a poll taken more than 48 hours after it is demanded, not
less than 24 hours before the time appointed for the taking
of the poll at which it is to be used (in each case excluding
non-business days).
4. In the case of joint holders, the vote of the senior who
tenders the vote shall be accepted to the exclusion of the
votes of the other joint holders and for this purpose, seniority
shall be determined by the order in which the names stand
in the Register of Members.
5. To appoint a proxy or to give or amend an instruction to a
previously appointed proxy via the CREST system, the CREST
message must be received by the issuer’s agent RA10 by
11.00 am on Tuesday, 6 May 2025. For this purpose, the
time of receipt will be taken to be the time (as determined
by the timestamp applied to the message by the CREST
Applications Host) from which the issuer’s agent is able
to retrieve the message. After this time, any change of
instructions to a proxy appointed through CREST should
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
be communicated to the proxy by other means. CREST
Personal Members or other CREST sponsored members and
those CREST Members who have appointed voting service
provider(s) should contact their CREST sponsor or voting
service provider(s) for assistance with appointing proxies
via CREST. For further information on CREST procedures,
limitations and systems timings please refer to the CREST
Manual. We may treat as invalid a proxy appointment sent
by CREST in the circumstances set out in Regulation 35(5)
of the Uncertificated Securities Regulations 2001. In any
case your proxy form must be received by the Company’s
Registrar no later than 11.00 am on Tuesday, 6 May 2025.
6. Proxymity Voting – If you are an institutional investor, you
may also be able to appoint a proxy electronically via the
Proxymity platform, a process which has been agreed by
the Company and approved by the Registrar. For further
information regarding Proxymity, please go to www.
proxymity.io. Your proxy must be lodged by no later than
11.00 am on Tuesday, 6 May 2025 in order to be considered
valid. Before you can appoint a proxy via this process, you
will need to have agreed to Proxymity’s associated terms
and conditions. It is important that you read these carefully
as you will be bound by them and they will govern the
electronic appointment of your proxy. An electronic proxy
appointment via the Proxymity platform may be revoked
completely by sending an authenticated message via the
platform instructing the removal of your proxy vote.
7. Unless otherwise indicated on the Form of Proxy, CREST
voting, Proxymity or any other electronic voting channel
instruction, the proxy will vote as they think fit or, at their
discretion, withhold from voting.
8. All members are entitled to attend and vote at the AGM
and ask questions. The right to vote at the meeting will be
determined by reference to the Register of Members as at
close of business on Tuesday, 6 May 2025. Shareholders are
urged to vote using the proxy form provided or electronically
where permitted by your nominee or platform.
9. The Company is pleased to be able to offer facilities for
shareholders to attend, ask questions and vote at the AGM
electronically in real time should they wish to do so. The
details are set out below.
In order to join the AGM electronically and ask questions
via the platform, shareholders will need to connect to the
following site: https://web.lumiagm.com. Lumi is available
as a mobile web client, compatible with the latest browser
versions of Chrome, Firefox, Edge and Safari and can be
accessed using any web browser, on a PC or smartphone
device.
Once you have accessed https://web.lumiagm.com from
your web browser on a tablet or computer, you will be asked
to enter the Lumi Meeting ID which is 124004169. You will
then be prompted to enter your unique 11 digit Investor
Code (“IVC”) including any leading zeros and ‘PIN’. Your PIN
is the last 4 digits of your IVC. This will authenticate you as a
shareholder.
Your IVC can be found on your share certificate or as
detailed on your proxy form. You can also obtain this by
contacting MUFG Corporate Markets, our Registrar, by
calling +44(0)371 277 1020*.
Access to the AGM will be available from 30 minutes before
the meeting start time, although the voting functionality
will not be enabled until the Chairman of the meeting
declares the poll open. During the AGM, you must ensure
you are connected to the internet at all times in order to vote
when the Chairman commences polling on the Resolutions.
Therefore, it is your responsibility to ensure connectivity for
the duration of the AGM via your wi-fi. A user guide to the
Lumi platform is available on the Company’s pages of the
Manager’s website at www.fidelity.co.uk/europe.
If you wish to appoint a proxy other than the Chairman of
the meeting and for them to attend the virtual meeting on
your behalf, please submit your proxy appointment in the
usual way before contacting MUFG Corporate Markets on
+44 (0) 371 277 1020* in order to obtain their IVC and PIN.
It is suggested that you do this as soon as possible and
at least 48 hours (excluding non-business days) before the
meeting.
If your shares are held within a nominee/platform and
you wish to attend the electronic meeting, you will need to
contact your nominee as soon as possible. Your nominee
will need to present a corporate letter of representation to
MUFG Corporate Markets, the Registrar, as soon as possible
and at least 72hours (excluding non-business days) before
the meeting, in order that they can obtain for you your
unique IVC and PIN to enable you to attend the electronic
meeting.
If you are unable to obtain a unique IVC and PIN from
your nominee or platform, we will also welcome online
participation as a guest. Once you have accessed https://
web.lumiagm.com from your web browser on a tablet
or computer, you will need to enter the Lumi Meeting ID
which is 124004169. You should then select the ‘Guest
Access’ option before entering your name and who you are
representing, if applicable. This will allow you to view the
meeting and ask questions but you will not be able to vote.
* Lines are open from 9.00 am. to 5.30 pm. Monday to Friday, excluding public
holidays in England and Wales. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the UK will be charged at the
applicable international rate.
10. Any person to whom this notice is sent who is a person
nominated under Section 146 of the Companies Act 2006 to
enjoy information rights (a “Nominated Person”) may, under
an agreement between him and the member by whom he
was nominated, have a right to be appointed (or to have
someone else appointed) as a proxy for the meeting. If a
Nominated Person has no such proxy appointment right
or does not wish to exercise it, he may, under any such
agreement, have a right to give instructions to the member
as to the exercise of voting rights. The statement of the rights
of members in relation to the appointment of proxies in
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Note 1 above does not apply to Nominated Persons. The
right described in that paragraph can only be exercised by
members of the Company.
11. If the Chairman, as a result of any proxy appointments, is
given discretion as to how the votes which are the subject
of those proxies are cast and the voting rights in respect
of those discretionary proxies, when added to the interests
in the Company’s securities already held by the Chairman,
result in the Chairman holding such number of voting rights
that he has a notifiable obligation under the Disclosure and
Transparency Rules, the Chairman will make the necessary
notifications to the Company and the Financial Conduct
Authority. As a result, any member holding 3% or more of
the voting rights in the Company who grants the Chairman
a discretionary proxy in respect of some or all of those
voting rights and so would otherwise have a notification
obligation under the Disclosure and Transparency Rules,
need not make separate notification to the Company and
the Financial Conduct Authority.
12. Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, the Company has specified that to
be entitled to attend and vote at the AGM (and for the
purpose of determining the number of votes they may cast),
members must be entered on the Register of Members by
close of business on Tuesday, 6 May 2025. If the meeting is
adjourned then, to be so entitled, members must be entered
on the Register of Members by close of business on the day
two days before the time fixed for the adjourned meeting,
or, if the Company gives notice of the adjourned meeting, at
any other time specified in that notice.
13. As at 19 March 2025 (the latest practicable date prior to
the publication of this document), the Company’s issued
share capital consisted of 416,447,910 ordinary shares. The
number of shares held by the Company in Treasury was
7,717,387. Therefore, the total number of shares with voting
rights in the Company was 408,730,523.
14. Any corporation which is a member can appoint one or
more corporate representative who may exercise on its
behalf all of its powers as a member provided that they do
not do so in relation to the same shares.
15. Shareholders and any proxies or representatives they
appoint understand that by attending the meeting they
are expressly agreeing that they are willing to receive any
communications, including communications relating to the
Company’s securities, made at the meeting.
16. It is possible that, pursuant to requests made by members of
the Company under Section 527 of the Companies Act 2006,
the Company may be required to publish on its website a
statement setting out any matter relating to the audit of the
Company’s accounts (including the Auditor’s report and the
conduct of the audit) that is to be laid before the AGM or
any circumstance connected with an Auditor of the Company
ceasing to hold office since the previous meeting at which
the Annual Report and Financial Statements were laid. The
Company may not require the Shareholders requesting any
such website publication to pay its expenses in complying
with such requests. Where the Company is required to
place a statement on a website under Section 527 of the
Companies Act 2006, it must forward the statement to the
Company’s Auditor not later than the time when it makes
the statement available on the website. The business which
may be dealt with at the AGM includes any statement that
the Company has been required under Section 527 of the
Companies Act 2006 to publish on its website.
17. No Director has a service contract with the Company.
Registered office: Beech Gate, Millfield Lane, Lower
Kingswood, Tadworth, Surrey KT20 6RP.
18. A copy of this notice and other information required by
Section 311A of the Companies Act 2006 is published on the
Company’s website at www.fidelity.co.uk/europe.
Registered office: Beech Gate, Millfield Lane, Lower Kingswood,
Tadworth, Surrey KT20 6RP.
Notice of Meeting continued
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
Investing in Fidelity European Trust PLC
Fidelity European Trust PLC is a company listed on the London
Stock Exchange and you can buy its shares through a platform,
stockbroker, share shop or bank. Fidelity also offers a range of
options, so that you can invest in the way that is best for you.
Details of how to invest and the latest Key Information Document
can be found on the Company’s pages of the Manager’s website
at www.fidelity.co.uk/europe.
CONTACT INFORMATION
Shareholders and Fidelity’s Platform Investors should contact the
appropriate administrator using the contact details given below
and in the next column. Links to the websites of major platforms
can be found online at: www.fidelity.co.uk/its.
Shareholders on the main share register
Contact MUFG Corporate Markets, Registrar to Fidelity European
Trust PLC, Central Square, 29 Wellington Street, Leeds LS1 4DL.
Email: shareholderenquiries@cm.mpms.mufg.com
Telephone: 0371 664 0300 (calls are charged at the standard
geographic rate and will vary by provider. Calls outside the
United Kingdom will be charged at the applicable international
rate. Lines are open 9:00 – 17:30, Monday to Friday, excluding
public holidays in England and Wales).
Details of individual shareholdings and other information can
also be obtained online from the Registrar’s Investor Centre at
uk.investorcentre.mpms.mufg.com/Login. Shareholders are
able to manage their shareholding online by registering for
theInvestor Centre, a free and secure online access service.
Facilities include:
Account Enquiry – Shareholders can access their personal
shareholding, including share transaction history, dividend
payment history and obtain an up-to-date shareholding valuation.
Amendment of Standing Data – Shareholders can change
their registered postal address and add, change or delete
dividend mandate instructions. Shareholders can also download
forms such as change of address, stock transfer and dividend
mandates as well as buy and sell shares in the Company.
Should you have any queries in respect of the Investor Centre,
contact the helpline on 0371 664 0391 (calls are charged at
the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable
international rate. Lines are open 9:00 – 17:30, Monday to Friday,
excluding public holidays in England and Wales).
Fidelity Platform Investors
Contact Fidelity, using the freephone numbers given below, or by
writing to: UK Customer Service, Fidelity, PO Box 391, Tadworth
KT20 9FU.
Website: www.fidelity.co.uk.
Private investors: call free on 0800 41 41 10, 09:00 – 18:00,
Monday to Saturday.
Financial advisers: call free on 0800 41 41 81, 08:00 – 18:00,
Monday to Friday.
General Enquiries
General enquiries should be made to the Secretary at the
Company’s registered office: FIL Investments International,
Investment Trusts, Beech Gate, Millfield Lane, Lower Kingswood,
Tadworth, Surrey KT20 6RP.
Telephone: 01737 836347
Email: investmenttrusts@fil.com.
Website: www.fidelity.co.uk/its.
If you hold Fidelity European Trust PLC shares in an account
provided by Fidelity International, you will receive a report every
six months detailing all of your transactions and the value of your
shares.
ShareGift
You may donate your shares to charity free of charge through
ShareGift. Further details are available at www.sharegift.org.uk.
Shareholder Information
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Managers and Advisors
Alternative Investment Fund Manager
(AIFM/the Manager)
FIL Investment Services (UK) Limited
Beech Gate
Millfield Lane
Lower Kingswood
Tadworth
Surrey
KT20 6RP
Investment Manager, Secretary and
Registered Office
FIL Investments International
Beech Gate
Millfield Lane
Lower Kingswood
Tadworth
Surrey
KT20 6RP
Email: investmenttrusts@fil.com
Banker and Custodian
JPMorgan Chase Bank (London Branch)
125 London Wall
London
EC2Y 5AJ
Depositary
J.P.Morgan Europe Limited
25 Bank Street
Canary Wharf
London
E14 5JP
Financial Adviser and Stockbroker
Winterflood Investment Trusts
Riverside House
2 Swan Lane
London
EC4R 3GA
Independent Auditor
Ernst & Young LLP
25 Churchill Place
London
E14 5EY
Lawyer
Simmons & Simmons LLP
1 Ropemaker Street
London
EC2Y 9SS
Registrar
MUFG Corporate Markets (name changed
from Link Group on 20 January 2025)
Central Square
29 Wellington Street
Leeds
LS1 4DL
Company Information
The Company was launched on 5 November 1991 with one
warrant attached to every five shares. The original subscription
price was £1 for each ordinary share of 25 pence each.
Following the sub-division of the ordinary shares on a ten for
one basis on 2 June 2014, the Company’s share capital now
comprises ordinary shares of 2.5 pence each and the restated
original subscription price is 10 pence for each ordinary share.
The Company is a member of the Association of Investment
Companies (“AIC”) from whom general information on investment
trusts can be obtained by telephoning 020 7282 5555 (email:
enquiries@theaic.co.uk).
Price Information
The share price of Fidelity European Trust PLC is published
daily in the Financial Times under the heading “Investment
Companies”. It is also published in The Times and The Daily
Telegraph. Price and performance information is also available
at www.fidelity.co.uk/europe.
Investors can also obtain current price information by telephoning
Fidelity for free on 0800 41 41 10 (freephone) or FT Cityline on
0905 817 1690 (voice activated service – calls charged at 60p
per minute on a per second basis from a BT landline. Charges
for other telephone networks may vary). The Reuters code for
Fidelity European Trust PLC is FEV.L, the SEDOL is BK1PKQ9 and
the ISIN is GB00BK1PKQ95.
Net Asset Value (“NAV”) Information
The Company’s NAV is calculated and released to the London
Stock Exchange on a daily basis.
UK Capital Gains Tax
All UK individuals under present legislation are permitted to
have £3,000 of capital gains in the current tax year 2025/2026
(2024/2025: £3,000) before being liable for capital gains tax. For
the 2025/2026 tax year, capital gains tax will be charged at 18%
and 24% dependent on the total amount of taxable income. For
the 2024/2025 tax year, capital gains tax charge is 10% or 20%
depending on the total amount of taxable income.
Shareholder Information continued
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
General Data Protection Regulation (“GDPR”)
What personal data is collected and how it is used
The Company is an investment trust which is a public limited company and has certain regulatory obligations such as the
requirement to send documents to its Shareholders, for example, the Annual Report and other documents that relate to meetings
of the Company. The Company will, therefore, collect Shareholders’ personal data such as names, addresses and identification
numbers or investor codes, and will use this personal data to fulfil its statutory obligations.
Any personal data collected will be kept securely on computer systems and in some circumstances on paper. Personal information
is kept secure in line with Fidelity’s Information Security policies and standards. If you are unhappy with how we have used your
personal data, you can complain by contacting the UK Data Protection Officer at Fidelity International, Beech Gate, Millfield Lane,
Lower Kingswood, Tadworth, Surrey KT20 6RP.
Sharing personal data
In order to assist the Company in meeting its statutory requirements, the Company delegates certain duties around the processing
of this data to its third party service providers, such as the Company’s Registrar and Printers. The Company has appointed
Fidelity to undertake marketing activities for the Company and their privacy statement can be found on the Company website at
https://investment-trusts.fidelity.co.uk/security-privacy/
The Company’s agreements with the third party service providers have been updated to be compliant with GDPR requirements.
The Company confirms to its Shareholders that their data will not be shared with any third party for any other purpose, such as for
marketing purposes. In some circumstances, it may be necessary to transfer shareholders’ personal data across national borders
to Fidelity Group entities operating in the European Economic Area (“EEA”). Where this does occur, the European standard of
protections will be applied to the personal data that is processed. Where personal data is transferred within the Fidelity group but
outside of the EEA, that data will subsequently receive the same degree of protection as it would in the EEA.
Retention period
Personal data will be kept for as long as is necessary for these purposes and no longer than legally permitted to do so.
Requesting access, making changes to personal data and other important information
Shareholders can access the information that the Company holds about them or ask for it to be corrected or deleted by contacting
Fidelity’s UK Data Protection Officer, Fidelity International, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP.
Fair treatment of investors
The legal and regulatory regime to which the Company and the Directors are subject ensures the fair treatment of investors. The
Listing Rules require that the Company treats all shareholders of the same class of shares equally. In particular, the Directors have
certain statutory duties under the Companies Act 2006 with which they must comply. These include a duty upon each Director to
act in the way she or he considers, in good faith, would be most likely to promote the success of the Company for the benefit of its
members as a whole.
Data Protection
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AAF Report
A report prepared in accordance with the Audit and Assurance
Faculty guidance issued by the Institute of Chartered Accountants
in England and Wales.
AIC
The Association of Investment Companies (“AIC”). The Company
is a member of the AIC.
AIF
Alternative Investment Fund (“AIF”). The Company is an AIF.
AIFM
Alternative Investment Fund Manager (“AIFM”). The Board has
appointed FIL Investment Services (UK) Limited to act as the
Company’s AIFM (the Manager).
AIFMD
The Alternative Investment Fund Managers Directive (“AIFMD”) is
a European Union Directive implemented on 22 July 2014.
Alternative Performance Measures
The Company uses the following Alternative Performance
Measures which are all defined in this Glossary of Terms:
• Discount/Premium;
• Gearing;
• Net Asset Value (NAV) per Ordinary Share;
• Ongoing Charges Ratio;
• Revenue, Capital and Total Returns; and
• Total Return Performance (Net Asset Value Total Return and
Ordinary Share Price Total Return).
Asset Exposure
The value of an underlying security or instrument to which
the Company is exposed, whether through direct or indirect
investment (including the economic value of the exposure in the
underlying asset of derivatives).
Benchmark Index
FTSE World Europe ex UK Index against which the performance
of the Company is measured.
Capital Gains Tax (CGT)
The tax that may be payable if shares are sold at a profit.
Collateral
Assets provided as security for the unrealised gain or loss under
a contract for difference.
Contract For Difference (CFD)
A contract for difference is a derivative. It is a contract between
the Company and an investment house at the end of which the
parties exchange the difference between the opening price and
the closing price of an underlying asset of the specified financial
instrument. It does not involve the Company buying or selling the
underlying asset, only agreeing to receive or pay the movement
in its share price. A contract for difference allows the Company
to gain access to the movement in the share price by depositing
a small amount of cash known as collateral. The Company may
reason that the asset price will rise, by buying (“long” position)
or fall, by selling (“short” position). If the Company holds long
positions, dividends are received and interest is paid. If the
Company holds short positions, dividends are paid and interest
is received
Corporation Tax
The UK tax the Company may have to pay on its profits. As
an investment trust company, the Company is exempt from UK
corporation tax on its capital gains and does not pay tax on any
UK dividends. It can also offset expenses against any taxable
income, and consequently it is tax efficient for the Company.
Custodian
An entity that holds (as intermediary) the Company’s assets,
arranges the settlement of transactions and administers income,
proxy voting and corporate actions. The Company’s Custodian is
JPMorgan Chase Bank.
Depositary
An entity that oversees the custody, cash arrangements and other
AIFM responsibilities of the Company. The Company’s Depositary
is J.P.Morgan Europe Limited.
Derivatives
Financial instruments (such as futures, options and contracts
for difference) whose value is derived from the value of an
underlying asset.
Discount
If the share price of the Company is lower than the net asset
value per ordinary share, the Company’s shares are said to be
trading at a discount.
Fair Value
The fair value is the best measure of the realisable value of the
investments, including derivatives, at a point in time and this is
measured as:
• Listed investments – valued at bid prices or last market
prices as available, otherwise at published price quotations;
• Contracts for difference – valued as the difference
between the settlement price of the contract and the value
of the underlying shares in the contract (unrealised gains or
losses); and
• Futures and options – valued at the quoted trade price for
the contract.
Fidelity International (Fidelity)
FIL Limited and its subsidiary group companies including FIL
Investment Services (UK) Limited and FIL Investments International
which act as AIFM, Secretary and Investment Manager.
Glossary of Terms
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
Future
An agreement to buy or sell a fixed amount of an asset at a fixed
future date and a fixed price.
Gearing
The economic exposure of the portfolio to its underlying assets in
excess of total net assets. It represents the additional exposure to
the market above Shareholders’ Funds. The Company uses two
measures of gearing (Gross Gearing and Net Gearing) which
are both defined in this Glossary of Terms.
Gross Asset Exposure
The value of the portfolio to which the Company is exposed,
whether through direct or indirect investment (including the
economic value of the exposure in the underlying asset of the
derivatives. It is the sum total of all Asset Exposures.
Gross Gearing
Gross Asset Exposure in excess of Shareholders’ Funds expressed
as a percentage of Shareholders’ Funds.
Hedging
A strategy aimed at minimising or eliminating the risk or loss
through adverse movements, normally involving taking a position
in a derivative such as a future or an option.
Investment Manager
FIL Investments International.
Manager
FIL Investment Services (UK) Limited is the appointed Manager
under the AIFMD. It has delegated the portfolio management of
assets to the Investment Manager.
Net Assets or Net Asset Value (NAV)
Also described as “Shareholders’ Funds”, net assets represent
the total value of the Company’s assets less the total value of its
liabilities. For valuation purposes it is common to express the net
asset value on a per ordinary share basis.
Net Asset Value per Ordinary Share
The net asset value divided by the number of ordinary shares in
issue.
Net Gearing
Net Market Exposure in excess of Shareholders’ Funds expressed
as a percentage of Shareholders’ Funds.
Net Market Exposure
Net Market Exposure is the total of all long exposures, less short
exposures and less exposures hedging the portfolio.
Ongoing Charges Ratio
Total operating expenses (excluding finance costs and taxation)
incurred by the Company as a percentage of the average daily
net asset values for the reporting year.
Options
An option is a contract which gives the right but not the
obligation to buy or sell the underlying asset at an agreed price
on or before an agreed date. Options may be calls (buy) or puts
(sell) and are used to gain or reduce exposure to the underlying
asset on a conditional basis.
Portfolio Managers
Sam Morse is the appointed Portfolio Manager of the Company
and is responsible for managing the Company’s assets. He is
assisted by the Co-Portfolio Manager, Marcel Stötzel.
Pre-Emption Rights
Section 561 of the Companies Act 2006 provides that a company
offering a new issue of shares must first make an offer of these
shares, on the same or more favourable terms, in proportion to
the nominal value held to existing Shareholders. At each Annual
General Meeting, the Board seeks Shareholder approval to
disapply pre-emption rights provision, up to 5% of the Company’s
issued share capital.
Premium
If the share price of the Company is higher than the net asset
value per ordinary share, the Company’s shares are said to be
trading at a premium. The premium is shown as a percentage of
the net asset value per ordinary share.
Registrar
An entity that manages the Company’s Shareholder register.
The Company’s Registrar is MUFG Corporate Markets (name
changed from Link Group on 20 January 2025).
Reserves
• Share premium account represents the amount by
which the proceeds from the issue of ordinary shares
has exceeded the cost of those ordinary shares. It is not
distributable by way of dividends and it cannot be used to
fund share repurchases.
• Capital redemption reserve maintains the equity share
capital of the Company and represents the nominal value
of shares repurchased and cancelled. It is not distributable
by way of dividends and it cannot be used to fund share
repurchases.
• Capital reserve represents realised gains or losses on
investments and derivatives sold, unrealised increases and
decreases in the fair value of investments and derivatives
held and other income and costs recognised in the capital
column of the Income Statement. It can be used to fund
share repurchases and issuance of shares from Treasury and
it is distributable by way of dividends.
• Revenue reserve represents retained revenue surpluses
recognised through the revenue column of the Income
Statement. It is distributable by way of dividends.
Return
The return generated in a given period from investments:
• Revenue return reflects the dividends and interest from
investments and other income, net of expenses, finance costs
and taxation;
• Capital return reflects the return on capital, excluding any
revenue return; and
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• Total return reflects the aggregate of revenue and capital
returns.
Shareholders’ Funds
Shareholders’ funds are also described as net asset value and
represent the total value of the Company’s assets less the total
value of its liabilities as shown in the balance sheet.
Total Return Performance
The return on the ordinary share price or net asset value per
ordinary share taking into account the rise and fall of share
prices and the dividends paid to shareholders. Any dividends
received by the shareholder are assumed to have been
reinvested in additional shares (for ordinary share price total
return) or the Company’s assets (for net asset value total return).
Treasury Shares
Ordinary shares of the Company that have been repurchased
by the Company and not cancelled but held in Treasury. These
shares do not pay dividends, have no voting rights and are
excluded from the net asset value per ordinary share calculation.
Glossary of Terms continued
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
In compliance with the Alternative Investment Fund Managers Directive (“AIFMD”), the Board has appointed FIL Investment Services
(UK) Limited (“FISL”) as the Company’s Alternative Investment Fund Manager (“AIFM”). FISL has delegated the portfolio management
of assets and company secretarial function to FIL Investments International. Details of the Management Agreement can be found in
the Directors’ Report on page 32.
The table below and on the next page discloses information required by the Alternative Investment Fund Managers Regulations 2013.
Function AIFM Role and Responsibility AIFMD Disclosure
Investment
management
The AIFM provides portfolio management of
assets and investment advice in relation to the
assets of the Company. It has delegated this
function to FIL Investments International.
The Board remains responsible for setting the
investment strategy, investment policy and
investment guidelines and the AIFM operates
within these guidelines.
Details of the Company’s investment objective,
strategy and investment policy, including limits, are
on pages 21 and 22.
Risk
management
The AIFM has a responsibility for risk
management for the Company which is in
addition to the Board’s corporate governance
responsibility for risk management.
The Company has a Risk Management
Process Document which demonstrates that
risk management is separated functionally
and hierarchically from operating units and
demonstrates independent safeguards. The
Manager maintains adequate risk management
systems in order to identify, measure and monitor
all risks at least annually under the AIFMD. The
Manager is responsible for the implementation
of various risk activities such as risk systems, risk
profile, risk limits and testing.
The Board, as part of UK corporate governance,
remains responsible for the identification of
significant risks and for the ongoing review of the
Company’s risk management and internal control
processes.
The AIFM has an ongoing process for identifying,
evaluating and managing the principal risks faced
by the Company and this is regularly reviewed
by the Board. The Board remains responsible for
the Company’s system of risk management and
internal control and for reviewing its effectiveness.
Further details can be found in the Strategic Report
on pages 23 to 27 and in Note 17 to the Financial
Statements on pages 67 to 72.
Valuation of
illiquid assets
The AIFMD requires the disclosure of the
percentage of the Alternative Investment Fund’s
assets which are subject to special arrangements
arising from their illiquid nature and any new
arrangements for managing the liquidity of the
Company.
As at the date of this report, none of the Company’s
assets were subject to special arrangements arising
from their illiquid nature.
Alternative Investment Fund Manager’s
Disclosure
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Function AIFM Role and Responsibility AIFMD Disclosure
Leverage
The Company uses leverage to increase its
exposure primarily to the stock markets of
continental Europe and currently holds derivatives
to achieve this. The AIFM has set maximum
levels of leverage that are reasonable. It has
implemented systems to calculate and monitor
compliance against these limits and has ensured
that the limits have been complied with at all
times.
There are two methods of calculating leverage
– the Gross Method which does not reduce
exposure for hedging; and the Commitment
Method which does reduce exposure for hedging.
The maximum leverage limits are 1.80 for the Gross
Method of calculating leverage and 1.50 for the
Commitment Method.
At 31 December 2024, actual leverage was 1.15
for the Gross Method and 1.17 for the Commitment
Method.
Liquidity
management
The AIFM, in consultation with the Board,
maintains a liquidity management policy which is
considered at least annually.
No new arrangements for managing the liquidity of
the Company have been made. Further details can
be found in Note 17 on page 69.
Remuneration
of the AIFM
The AIFM operates under the terms of Fidelity
International’s Global Remuneration Policy.
This ensures that the AIFM complies with the
requirements of the FCA’s Remuneration Code
(SYSC19A); the AIFM Remuneration Code
(SYSC19B) and the BIPRU Remuneration Code
(SYSC19C).
Details of Fidelity International’s Global Remuneration
Policy can be found at www.fidelityinternational.
com/global/remuneration/default.page
EU Securities Financing Transactions Regulations (“SFTR”)
The following disclosures relate to contracts for difference (“CFDs”) held by the Company which may be considered Total Return
Swaps under the SFTR, which came into force on 12 January 2016.
As at 31 December 2024, all CFDs were contracted bilaterally with open maturities:
Broker
Fair Value
£’000
Percentage
of
Net Assets
Collateral
held by the
broker
£’000
Collateral
held by the
Company
£’000
J.P.Morgan Securities plc (UK) (4,639) 0.30% – 5,025
UBS AG (36) 0.00% 50 –
Collateral held by the broker was denominated in UK sterling and held in a segregated account on behalf of the Company with a
maturity of one day. The total return for the year ended 31 December 2024 from CFDs was a gain of £26,193,000.
Alternative Investment Fund Manager’s
Disclosure continued
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FIL Investments International (Company No. 1448245) FIL Investment Services (UK) Limited (Company No. 2016555) Financial Administration
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exception of FIL Life Insurance Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority. UKM1024/388153/ P
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