Edison issues research review on Fidelity European Value
OREANDA-NEWS. Fidelity European Values (FEV) aims to achieve long-term capital growth through investing primarily in continental European equities. The manager follows a consistent bottom-up approach, seeking to identify companies able to grow dividends over a three- to five-year horizon. FEV's NAV total return performance has been ahead of its FTSE World Europe ex-UK benchmark over three, five and 10 years, although investments in out-of-favour areas of the market have given the portfolio a slightly contrarian large-cap bias relative to peers, which has been unhelpful during recent small-cap outperformance. The portfolio's historically high relative dividend yield and superior growth prospects are seen by the manager as a positive indicator for future performance.
Concerns over the outcome of the UK's EU referendum appear to have contributed to the recent widening of FEV's share price discount to NAV including income towards the wider end of its 2.8% to 12.9% three-year range, suggesting significant scope for it to narrow when market sentiment improves.
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