Fidelity European Trust Plc - Half-year Report
Half-Yearly Results for the six months ended
Financial Highlights:
-- The Board of Fidelity European Trust PLC (the “Company”) declares an
interim dividend of 3.60 pence per share, an increase of 10.4% on the
prior year.
-- In the six-month period ended 30 June 2024 , the Company reported a net
asset value (NAV) return of +7.6% and ordinary share price total return
of +10.6% outperforming the Benchmark Index, the FTSE World Europe (ex
UK ) Index, which returned +7.1%.
-- Holdings in ASML, Novo Nordisk and 3i Group were key drivers of
performance.
Contacts
For further information, please contact:
Company Secretary
01737 836347
Portfolio Managers’ Half-Yearly Review
Performance Review
During the first six months of the year, the net asset value (“NAV”) total return was +7.6% compared to a total return of +7.1% for the FTSE World Europe (ex
Market Review
In the first half of this year, continental European markets were boosted by the resilience of global economic growth and the anticipation of interest rate reductions given lower rates of inflation. The
Despite the
The “growth” themes that had led markets higher last year continued to dominate performance in this period. The perceived long-term impact of generative Artificial Intelligence (“AI”) remained an area of optimism, not only for specific technology providers, but also for corporate productivity in general. Obesity medications, which have to date seen strong launches, also continued to attract investors’ admiration. In addition, some “value” sectors also performed very strongly, in particular the banking sector, which continued to report substantial earnings and dividends, helped by high levels of net interest income and low levels of credit losses.
PORTFOLIO MANAGERS
’
REPORT
The company’s NAV total return outperformed the Company’s Benchmark over the six month reporting period. The gearing of the Company, given rising markets, was the main contributor to this outperformance. The contribution from stock-picking was mixed during this period.
Two of the largest holdings in the Company, namely
Detractors from performance included a number of names in the consumer sector, such as L’Oréal, Nestlé and LVMH Moët Hennessy. Consumers in the US have been more restrained now that pandemic savings have been spent. The recovery in consumer spending in
Top Five Stock Contributors (on a Sector Country % relative basis) ASML Information Technology Netherlands 0.8Novo Nordisk Health Care Denmark 0.8 3i Group Financials UK 0.6 SAP Information Technology Germany 0.5 Bankinter Financials Spain 0.3 =========
Top Five Stock Detractors (on a Sector Country % relative basis) Dassault Systèmes Information Technology France -0.5 L'Oréal Consumer Staples France -0.5 Partners Group Financials Switzerland -0.4 Nestlé Consumer Staples Switzerland -0.4SIG Group Materials Switzerland -0.3 =========
Outlook
The COVID-19 global pandemic — a “once in a century” event — has set off a long-lasting chain reaction that is unpredictable and makes fools of forecasters (including the Company’s Portfolio Managers!). We thought the rapid and steep monetary tightening which followed the pandemic would end in recession, as it so often does, following an inversion of the yield curve. That has not, to date, been the case. Indeed, the global economy has been much more resilient than anticipated and corporate earnings have held up well supporting stock markets around the world. As highlighted above, many stock markets are reaching all-time highs. However, we are now seeing some signs of consumers reining in their spending, particularly in the US. Consumption is the main growth engine of developed economies. Is this an early warning sign that the dreaded recession is upon us just as the optimists declare victory? To add to this, there is considerable geopolitical uncertainty expected post the US elections, not least the potential changes in US foreign policy when it comes to the tragic
Whatever the constitution of the new French government following the result of the French parliamentary elections, we have little optimism regarding the short or long-term outlook for the French domestic economy for the same reasons that we are gloomy about the outlook for the domestic economies of
However, whatever our views on the outlook, we will maintain gearing within the prescribed range and we will continue to focus on attractively valued companies with strong balance sheets that should be resilient, and able to grow dividends, even in a more difficult environment.
Portfolio Manager
MARCEL STÖTZEL
Co-Portfolio Manager
Twenty
The Asset Exposures shown below measure exposure to market price movements as a result of owning shares and derivative instruments. The Fair Value is the realisable value of the investments 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.
Fair
Asset Exposure Value
£’000 %1 £’000
Long Exposures – shares unless
otherwise stated
Novo Nordisk
Pharmaceuticals & Biotechnology 135,335 8.0 135,335
ASML
Technology Hardware & Equipment 126,510 7.5 126,510
Nestlé
Food Producers 92,647 5.5 92,647
SAP (long CFD)
Software & Computer Services 76,830 4.6 4,792
LVMH Moët Hennessy
Personal Goods 73,704 4.4 73,704
TotalEnergies
Oil, Gas & Coal 73,565 4.4 73,565
Roche
Pharmaceuticals & Biotechnology 67,402 4.0 67,402
L'Oréal
Personal Goods 58,593 3.5 58,593
EssilorLuxottica
Medical Equipment & Services 56,079 3.3 56,079
3i Group
Investment Banking & Brokerage 49,769 2.9 49,769
Services
Hermès International
Personal Goods 47,208 2.8 47,208
Legrand (long CFD)
Electronic & Electrical 45,366 2.7 (2,067)
Equipment
Partners Group
Investment Banking & Brokerage 44,027 2.6 44,027
Services
Sanofi
Pharmaceuticals & Biotechnology 43,126 2.5 43,126
Long Exposures – shares unless
otherwise stated
Deutsche Börse Group
Investment Banking & Brokerage 42,980 2.5 42,980
Services
Assa Abloy
Construction & Materials 40,715 2.4 40,715
Linde (long CFD)
Chemicals 39,348 2.3 25
Sampo
Non-Life Insurance 36,380 2.1 36,380
Kone
Industrial Engineering 34,975 2.1 34,975
Intesa Sanpaolo
Banks 34,853 2.1 34,853
--------------- --------------- ---------------
Twenty largest long exposures 1,219,412 72.2 1,060,618
========= ========= =========
Other long exposures 586,379 34.8 568,018
--------------- --------------- ---------------
Total long exposures before long 1,805,791 107.0 1,628,636
futures2,3
========= ========= =========
Long Futures
EURO STOXX 50 Future September 69,923 4.1 531
20243
--------------- --------------- ---------------
Total long exposures after long 1,875,714 111.1 1,629,167
futures3
========= ========= =========
Short Exposures
Short CFDs (1 Holding) 12,990 0.8 (257)
--------------- --------------- ---------------
Gross Asset Exposure3,4 1,888,704 111.9
========= =========
Portfolio Fair Value5 1,628,910
Net current assets (excluding
derivative assets and 59,173
liabilities)
---------------
Shareholders’ Funds (per Balance 1,688,083
Sheet below)
=========
1 Asset Exposure is expressed as a percentage of Shareholders’ Funds.
2 Total long exposures before long futures comprises investments of £1,626,177,000 and long CFDs of £179,614,000.
3 See Note 13 below.
4 Gross Asset Exposure comprises market exposure to investments of £1,626,177,000 plus market exposure to all derivative instruments of £262,527,000. Derivative instruments comprise long CFDs of £179,614,000, long futures of £69,923,000 and short CFDs of £12,990,000.
5 Portfolio Fair Value comprises investments of £1,626,177,000 plus derivative assets of £5,348,000 less derivative liabilities of £2,615,000 (per the Balance Sheet below).
Interim Management Report and Directors’ Responsibility Statement
Interim Dividend
As part of their investment process, the Portfolio Managers focus on companies capable of growing their dividends over time. The Board does not impose any income objective in any particular period, recognising that both capital and income growth are components of performance, as reflected in the investment objective of the Company. The Board does, however, have a policy whereby it seeks to pay 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 six months to
Shareholders may choose to reinvest their dividends for additional shares in the Company.
Discount Management and Treasury Shares
The Board has an active discount management policy, the primary purpose of which is to reduce discount volatility. It seeks to maintain the discount in single digits in normal market conditions. Buying shares at a discount also results in an enhancement to the NAV per ordinary share.
In order to assist in managing the discount, the Board has shareholder approval to hold ordinary shares repurchased by the Company in
In the reporting period and up to the date of this report, the discount remained in single digits and the Company did not repurchase any ordinary shares into
Principal Risks and Uncertainties
The Board, with the assistance of the Manager (
The Board considers that the principal risks and uncertainties faced by the Company continue to fall into the following categories: geopolitical, economic and market risks; investment performance (including the use of derivatives and gearing) risk; regulatory (including tax) risk; key person risk; environmental, social and governance (ESG) risks; cybercrime and information security risks; discount control risk; and business continuity risk. Information on each of these risks is given in the Strategic Report section of the Annual Report for the year ended
While the principal risks and uncertainties remain the same as those at the last year end, the magnitude of their uncertainty continues to grow with the ongoing conflicts in
Climate change continues to be a key principal risk confronting asset managers and their investors. Globally, climate change effects are already being experienced in the form of changing weather patterns. Climate change can potentially impact the operations of investee companies, their supply chains and their customers. Additional risks may also arise from increased regulations, costs and net-zero programmes which can all impact investment returns. The Board notes that the Manager has integrated 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, the main risk being the impact on investment valuations and potentially shareholder returns.
The Board and the Manager are 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. Although advances in computing power mean that AI is a powerful tool that will impact society, there are risks from its increasing use and manipulation with the potential to harm, including a heightened threat to cybersecurity.
Investors should be prepared for market fluctuations and remember that holding shares in the Company should be considered to be a long-term investment. Risks are mitigated by the investment trust structure of the Company which means that the Portfolio Managers are not required to trade to meet investor redemptions. Therefore, investments in the Company’s portfolio can be held over a longer-time horizon.
The Manager has appropriate business continuity and operational resilience plans in place to ensure the continued provision of services. This includes investment team key activities, including those of portfolio managers, analysts and trading/support functions. The Manager reviews its operational resilience strategies on an ongoing basis and continues to take all reasonable steps in meeting its regulatory obligations, assess its ability to continue operating and the steps it needs to take to serve and support its clients, including the Board.
The Company’s other third-party service providers also have similar measures in place to ensure that business disruption is kept to a minimum.
Transactions with the Manager and Related Parties
The Manager has delegated the Company’s portfolio management and company secretariat services to
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 can continue in operational existence for a period of at least twelve months from the date of this Half-Yearly Report.
This conclusion also takes into account the Board’s assessment of the ongoing risks as outlined above.
Accordingly, the Financial Statements of the Company have been prepared on a going concern basis.
Continuation votes are held every two years and the next continuation vote will be put to shareholders at the Annual General Meeting in 2025.
BY ORDER OF THE BOARD
DIRECTORS’ RESPONSIBILITY STATEMENT
The Disclosure and Transparency Rules (“DTR”) of the
The Directors confirm to the best of their knowledge that:
a) The condensed set of Financial Statements contained within the Half-Yearly Report has been prepared in accordance with the Financial Reporting Council’s Standard FRS Interim Financial Reporting; and
b) The Portfolio Managers’ Half-Yearly Review and the Interim Management Report above, include a fair review of the information required by DTR 4.2.7R and 4.2.8R.
In line with previous years, the Half-Yearly Report has not been audited or reviewed by the Company’s Independent Auditor.
The Half-Yearly Report was approved by the Board on
FINANCIAL STATEMENTS
Income Statement for the six months ended
Six months ended 30 June 2024 Six months ended 30 June 2023 Year ended 31 December 2023
unaudited unaudited audited
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Gains on – 76,095 76,095 – 94,641 94,641 – 165,905 165,905
investments
Gains on
derivative – 21,012 21,012 – 36,841 36,841 – 50,441 50,441
instruments
Income 4 41,081 – 41,081 35,816 – 35,816 47,221 – 47,221
Investment
management 5 (1,437) (4,311) (5,748) (1,303) (3,910) (5,213) (2,625) (7,877) (10,502)
fees
Other (521) – (521) (507) – (507) (967) – (967)
expenses
Foreign
exchange – (1,577) (1,577) – (2,599) (2,599) – (1,464) (1,464)
losses
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return
on ordinary
activities
before 39,123 91,219 130,342 34,006 124,973 158,979 43,629 207,005 250,634
finance
costs and
taxation
Finance 6 (1,488) (4,463) (5,951) (908) (2,724) (3,632) (2,138) (6,414) (8,552)
costs
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return
on ordinary
activities 37,635 86,756 124,391 33,098 122,249 155,347 41,491 200,591 242,082
before
taxation
Taxation on
return on 7 (3,391) – (3,391) (2,916) – (2,916) (3,390) – (3,390)
ordinary
activities
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return
on ordinary
activities
after 34,244 86,756 121,000 30,182 122,249 152,431 38,101 200,591 238,692
taxation
for the
period
Return per
ordinary 8 8.38p 21.22p 29.60p 7.38p 29.91p 37.29p 9.32p 49.08p 58.40p
share
========= ========= ========= ========= ========= ========= ========= ========= =========
The Company does not have any other comprehensive income. Accordingly, the net return on ordinary activities after taxation for the period is also the total comprehensive income for the period 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 period and all items in the above statement derive from continuing operations.
Statement of Changes in Equity for the six months ended
Share Capital Total
Share premium redemption Capital Revenue shareholder’
capital account reserve reserve reserve fund
Notes £’000 £’000 £’000 £’000 £’000 £’000
Six months
ended 30 June
2024
(unaudited)
Total
shareholders’ 10,411 58,615 5,414 1,472,587 40,452 1,587,479
funds at 31
December 2023
Net return on
ordinary
activities – – – 86,756 34,244 121,000
after
taxation for
the period
Dividend paid
to 9 – – – – (20,396) (20,396)
shareholders
--------------- --------------- --------------- --------------- --------------- ---------------
Total
shareholders’ 10,411 58,615 5,414 1,559,343 54,300 1,688,083
funds at 30
June 2024
========= ========= ========= ========= ========= =========
Six months
ended 30 June
2023
(unaudited)
Total
shareholders’ 10,411 58,615 5,414 1,271,996 34,559 1,380,995
funds at 31
December 2022
Net return on
ordinary
activities – – – 122,249 30,182 152,431
after
taxation for
the period
Dividend paid
to 9 – – – – (18,883) (18,883)
shareholders
--------------- --------------- --------------- --------------- --------------- ---------------
Total
shareholders’ 10,411 58,615 5,414 1,394,245 45,858 1,514,543
funds at 30
June 2023
========= ========= ========= ========= ========= =========
Year ended 31
December 2023
(audited)
Total
shareholders’ 10,411 58,615 5,414 1,271,996 34,559 1,380,995
funds at 31
December 2022
Net return on
ordinary
activities – – – 200,591 38,101 238,692
after
taxation for
the year
Dividends
paid to 9 – – – – (32,208) (32,208)
shareholders
--------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total
shareholders’ 10,411 58,615 5,414 1,472,587 40,452 1,587,479
funds at 31
December 2023
========= ========= ========= ========= ========= ========= =========
Balance Sheet as at
Company Number 2638812
30 June 31 December 30 June
2024 2023 2023
unaudited audited unaudited
Notes £’000 £’000 £’000
Fixed assets
Investments 10 1,626,177 1,518,875 1,459,305
--------------- --------------- ---------------
Current assets
Derivative instruments 10 5,348 886 3,919
Debtors 13,404 11,449 12,141
Amounts held at futures
clearing houses and 4,545 8,384 5,869
brokers
Cash and cash equivalents 42,633 52,804 36,362
--------------- --------------- ---------------
65,930 73,523 58,291
========= ========= =========
Current liabilities
Derivative instruments 10 (2,615) (3,521) (1,681)
Other creditors (1,409) (1,398) (1,372)
--------------- --------------- ---------------
(4,024) (4,919) (3,053)
========= ========= =========
Net current assets 61,906 68,604 55,238
========= ========= =========
Net assets 1,688,083 1,587,479 1,514,543
========= ========= =========
Capital and reserves
Share capital 11 10,411 10,411 10,411
Share premium account 58,615 58,615 58,615
Capital redemption reserve 5,414 5,414 5,414
Capital reserve 1,559,343 1,472,587 1,394,245
Revenue reserve 54,300 40,452 45,858
--------------- --------------- ---------------
Total shareholders’ funds 1,688,083 1,587,479 1,514,543
========= ========= =========
Net asset value per 12 413.01p 388.39p 370.55p
ordinary share
========= ========= =========
Notes to the Financial Statements
1 Principal Activity
2 Publication of Non-statutory Accounts
The Financial Statements in this Half-Yearly Report have not been audited by the Company's Independent Auditor and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006 ("the Act"). The financial information for the year ended
3 ACCOUNTING POLICIES
(i) Basis of Preparation
The Company prepares its Financial Statements on a going concern basis and in accordance with
(ii) Going Concern
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least twelve months from the date of approval of these Financial Statements. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these Financial Statements. This conclusion also takes into account the Board’s assessment of the risks faced by the Company as detailed in the Interim Management Report above.
4 Income
Six months Six months Year
ended ended ended
30.06.24 30.06.23 31.12.23
unaudited unaudited audited
£’000 £’000 £’000
Investment income
Overseas dividends 33,375 28,415 37,484
Overseas scrip dividends – 957 957
UK dividends 957 965 1,679
--------------- --------------- ---------------
34,332 30,337 40,120
========= ========= =========
Derivative income
Income recognised from futures 1,659 1,797 2,392
contracts
Dividends received on long CFDs 3,536 3,339 3,570
Interest received on CFDs 180 61 333
--------------- --------------- ---------------
5,375 5,197 6,295
========= ========= =========
Investment and derivative income 39,707 35,534 46,415
========= ========= =========
Other interest
Interest received on collateral,
bank deposits and money market 1,342 276 798
funds
Interest received on tax 32 6 8
reclaims
--------------- --------------- ---------------
1,374 282 806
========= ========= =========
Total income 41,081 35,816 47,221
========= ========= =========
Special dividends of £nil have been recognised in capital during the period (six months ended
5 Investment Management Fees
Revenue Capital Total
£’000 £’000 £’000
Six months ended 30 June 2024
(unaudited)
Investment management fees 1,437 4,311 5,748
--------------- --------------- ---------------
Six months ended 30 June 2023
(unaudited)
Investment management fees 1,303 3,910 5,213
--------------- --------------- ---------------
Year ended 31 December 2023
(audited)
Investment management fees 2,625 7,877 10,502
========= ========= =========
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.
6 Finance Costs
Revenue Capital Total
£’000 £’000 £’000
Six months ended 30 June 2024
(unaudited)
Interest paid on bank deposits 7 22 29
Interest paid on CFDs1 1,145 3,435 4,580
Costs recognised from futures 336 1,006 1,342
contracts
--------------- --------------- ---------------
1,488 4,463 5,951
========= ========= =========
Six months ended 30 June 2023
(unaudited)
Interest paid on CFDs1 647 1,942 2,589
Costs recognised from futures 261 782 1,043
contracts
--------------- --------------- ---------------
908 2,724 3,632
========= ========= =========
Year ended 31 December 2023
(audited)
Interest paid on CFDs1 1,601 4,803 6,404
Costs recognised from futures 537 1,611 2,148
contracts
--------------- --------------- ---------------
2,138 6,414 8,552
========= ========= =========
1 The interest paid on CFDs is higher in the current reporting period due to an increase of long CFDs exposures and interest rates. As a result, the Company has been exposed to higher interest charges.
Finance costs have been allocated 75% to capital reserve in accordance with the Company’s accounting policies.
7 Taxation on Return on Ordinary Activities
Six months Six months Year
ended ended ended
30.06.24 30.06.23 31.12.23
unaudited unaudited audited
£’000 £’000 £’000
Overseas taxation 3,391 2,916 3,390
--------------- --------------- ---------------
8 Return per Ordinary Share
Six months Six months Year
ended ended ended
30.06.24 30.06.23 31.12.23
unaudited unaudited audited
Revenue return per ordinary 8.38p 7.38p 9.32p
share
Capital return per ordinary 21.22p 29.91p 49.08p
share
--------------- --------------- ---------------
Total return per ordinary share 29.60p 37.29p 58.40p
========= ========= =========
The return per ordinary share is based on the net return on ordinary activities after taxation for the period divided by the weighted average number of ordinary shares held outside
£’000 £’000 £’000
Net revenue return on ordinary 34,244 30,182 38,101
activities after taxation
Net revenue return on ordinary 86,756 122,249 200,591
activities after taxation
--------------- --------------- ---------------
Net total return on ordinary 121,000 152,431 238,692
activities after taxation
========= ========= =========
Number Number Number
Weighted average number of ordinary shares 408,730,523 408,730,523 408,730,523
held outside Treasury during the period
========= ========= =========
9 Dividends Paid to Shareholders
Six months Six months Year
ended ended ended
30.06.24 30.06.23 31.12.23
unaudited unaudited audited
£’000 £’000 £’000
Final dividend of 4.99 pence per
ordinary share paid for the year 20,396 – –
ended 31 December 2023
Interim dividend of 3.26 pence
per ordinary share paid for the – – 13,325
year ended 31 December 2023
Final dividend of 4.62 pence per
ordinary share paid for the year – 18,883 18,883
ended 31 December 2022
--------------- --------------- ---------------
20,396 18,883 32,208
========= ========= =========
The Company has declared an interim dividend for the six month period to
10 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.
Valued by reference to inputs other than quoted prices included
Level 2 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.
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 table below sets out the Company’s fair value hierarchy:
Level 1 Level 2 Level 3 Total
30 June 2024 £’000 £’000 £’000 £’000
(unaudited)
Financial assets
at fair value
through profit
or loss
Investments 1,626,177 – – 1,626,177
Derivative
instrument 531 4,817 – 5,348
assets
--------------- --------------- --------------- ---------------
1,626,708 4,817 – 1,631,525
========= ========= ========= =========
Financial
liabilities at
fair value
through profit
or loss
Derivative
instrument – (2,615) – (2,615)
liabilities
========= ========= ========= =========
Level 1 Level 2 Level 3 Total
31 December 2023 £’000 £’000 £’000 £’000
(audited)
Financial assets
at fair value
through profit
or loss
Investments 1,518,875 – – 1,518,875
Derivative
instrument – 886 – 886
assets
--------------- --------------- --------------- ---------------
1,518,875 886 – 1,519,761
========= ========= ========= =========
Financial
liabilities at
fair value
through profit
or loss
Derivative
instrument (348) (3,173) – (3,521)
liabilities
========= ========= ========= =========
Level 1 Level 2 Level 3 Total
30 June 2023 £’000 £’000 £’000 £’000
(unaudited)
Financial assets
at fair value
through profit
or loss
Investments 1,459,305 – – 1,459,305
Derivative
instrument 1,120 2,799 – 3,919
assets
--------------- --------------- --------------- ---------------
1,460,425 2,799 – 1,463,224
========= ========= ========= =========
Financial
liabilities at
fair value
through profit
or loss
Derivative
instrument – (1,681) – (1,681)
liabilities
========= ========= ========= =========
11 Share Capital
30 June 2024 31 December 2023 30 June 2023
unaudited audited unaudited
Number of Number of Number of
shares £’000 shares £’000 shares £’000
Issued,
allotted
and fully
paid
Ordinary
shares of
2.5 pence
each held
outside of
Treasury
Beginning
of the 408,730,523 10,218 408,730,523 10,218 408,730,523 10,218
period
Ordinary
shares
repurchased – – – – – –
into
Treasury
--------------- --------------- --------------- --------------- --------------- ---------------
End of the 408,730,523 10,218 408,730,523 10,218 408,730,523 10,218
period
========= ========= ========= ========= ========= =========
Ordinary
shares of
2.5 pence
each held
in
Treasury1
Beginning
of the 7,717,387 193 7,717,387 193 7,717,387 193
period
Ordinary
shares
repurchased – – – – – –
into
Treasury
--------------- --------------- --------------- --------------- --------------- ---------------
End of the 7,717,387 193 7,717,387 193 7,717,387 193
period
========= ========= ========= ========= ========= =========
Total share 10,411 10,411 10,411
capital
========= ========= =========
1
Ordinary shares held in
During the period, no ordinary shares were repurchased into
12 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
30.06.24 31.12.23 30.06.23
unaudited audited unaudited
Total shareholders’ funds £1,688,083,000 £1,587,479,000 £1,514,543,000
Ordinary shares held outside of 408,730,523 408,730,523 408,730,523
Treasury at the period end
Net asset value per ordinary share 413.01p 388.39p 370.55p
========= ========= =========
It is the Company’s policy that shares held in
13 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 above, 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.
The Company’s gross gearing and net gearing at the end of the period is shown below:
Gross gearing Net gearing
Asset exposure Asset exposure
£’000 %1 £’000 %1
30 June 2024
(unaudited)
Investments 1,626,177 96.3 1,626,177 96.3
Long CFDs 179,614 10.7 179,614 10.7
Long futures 69,923 4.1 69,923 4.1
--------------- --------------- --------------- ---------------
Total long 1,875,714 111.1 1,875,714 111.1
exposures
========= ========= ========= =========
Short CFDs 12,990 0.8 (12,990) (0.8)
========= ========= ========= =========
Gross asset
exposure/net 1,888,704 111.9 1,862,724 110.3
market exposure
Shareholders’ 1,688,083 1,688,083
funds
========= ========= ========= =========
Gearing2 11.9 10.3
========= =========
31 December 2023
(audited)
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 1,783,312 112.3 1,783,312 112.3
exposures
========= ========= ========= =========
Short CFDs 12,736 0.8 (12,736) (0.8)
--------------- --------------- --------------- ---------------
Gross asset
exposure/net 1,796,048 113.1 1,770,576 111.5
marketexposure
Shareholders’ 1,587,479 1,587,479
funds
========= =========
Gearing2 13.1 11.5
========= =========
1 Asset exposure to the market expressed as a percentage of shareholders’ funds.
2 Gearing is the amount by which the gross asset exposure/net market exposure exceeds shareholders' funds expressed as a percentage of shareholders’ funds.
Gross gearing Net gearing
Asset exposure Asset exposure
30 June 2023 £’000 %1 £’000 %1
(unaudited)
Investments 1,459,305 96.4 1,459,305 96.4
Long CFDs 177,871 11.7 177,871 11.7
Long futures 60,659 4.0 60,659 4.0
--------------- --------------- --------------- ---------------
Total long 1,697,835 112.1 1,697,835 112.1
exposures
========= ========= ========= =========
Short CFDs 18,101 1.2 (18,101) (1.2)
Gross asset
exposure/net 1,715,936 113.3 1,679,734 110.9
market exposure
Shareholders’ 1,514,543 1,514,543
funds
========= ========= ========= =========
Gearing2 13.3 10.9
========= =========
1 Asset exposure to the market expressed as a percentage of shareholders’ funds.
2 Gearing is the amount by which the gross asset exposure/net market exposure exceeds shareholders’ funds expressed as a percentage of shareholders’ funds.
14 Transactions with the Manager and Related Parties
During the period, fees for portfolio management services of £5,748,000 (six months ended
As at
The financial information contained in this Half-Yearly Results Announcement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the six months ended
The information for the year ended
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
A copy of the Half-Yearly Report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM
The Half-Yearly Report will also be available on the Company's website at www.fidelity.co.uk/europe where up to date information on the Company, including daily NAV and share prices, factsheets and other information can also be found.
