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Fidelity European Inclusive - Class A - Income (GBP)

Sell:223.70p Buy:223.70p Change: 3.00p (1.32%)
Prices as at 6 August 2020
Change: 3.00p (1.32%)
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Prices as at 6 August 2020
Change: 3.00p (1.32%)
Prices as at 6 August 2020
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

Our view on this Fund

This fund does not feature on the Wealth Shortlist of funds our analysts believe have the potential to outperform their peers over the long term. This is not a recommendation to sell; however, if you are thinking of adding to your investments, we believe the Wealth Shortlist is a good place to start. View funds on the Wealth Shortlist »

We think Sam Morse is a capable and experienced fund manager. We like his focus on quality companies with the potential to make plenty of cash. This could help support a healthy and growing dividend - a key part of what he looks for in a company. Overall, he's a cautious investor and we view the fund as a more conservative way to invest in European companies.

The fund isn't currently on the Wealth 50 list of our favourite funds. We think Morse has the ability to deliver good returns for investors. But we already have a good line-up of quality managers with longer track records in the Europe sector on the list. They also have greater flexibility to invest differently to the broader market, which offers more potential to perform better over prolonged periods.

Our view on the sector

Europe has been blighted by political issues in recent years. And some European economies are struggling with high levels of debt and unemployment. But it's important to disconnect a region's economic prospects from its stock market prospects. Europe is home to lots of successful businesses that make money across the globe - from the US to high-growth areas like Asia and emerging markets. That means their prospects aren't heavily reliant on Europe's economy. Some investors have overlooked the region in recent years. But we think Europe is a great place to invest for the long term and there are plenty of high quality fund managers to choose from.

Performance Analysis

The fund has delivered respectable performance since Morse took over its management. So far it's performed better than the broader European stock market. It's also tended to offer an element of shelter in a falling market, but lag a rapidly rising market. Past performance isn't a guide to future returns.

The amount Morse invests in each sector doesn't differ too much from the broader market. This means performance is likely to be similar over shorter periods. But Morse thinks it could help deliver modest outperformance over the long run, without significant levels of volatility. There are no guarantees though.

Investment Philosophy

Morse looks for companies he thinks can grow their dividends sustainably over the long run. He thinks this is a sign the business is in a strong position and generates healthy levels of cash. He expects these businesses to hold up better during tougher market conditions.

Process and Portfolio Construction

Morse focuses on larger European companies he thinks will grow consistently and offer some stability, rather than those that deliver shorter bursts of stronger growth, but the potential for bigger setbacks. He also likes companies he thinks will grow their dividends at a steady pace. It's often a sign they're in good financial health, and a growing dividend can be a driver of share price growth over the long run. Remember that dividends are variable and not guaranteed. He aims to avoid companies with high levels of debt, whose earnings are closely tied to the health of the wider economy.

The manager's reduced the number of investments in the fund in recent years, to focus on those he thinks have the most potential for growth. This means each one can have a greater impact on performance, though this is a higher-risk approach. The ability to use derivatives also adds risk. Companies are usually sold from the fund if they cut their dividends.

question mark Manager Track Record Based on HL Quantitative Research

  • Fidelity European A Acc
  • FTSE World Europe ex UK TR GBP

Fund Track Record

06/08/15 to 06/08/16 06/08/16 to 06/08/17 06/08/17 to 06/08/18 06/08/18 to 06/08/19 06/08/19 to 06/08/20
Annual return 7.84% 20.68% 10.59% 3.73% 5.18%

Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.