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 3.90 pence per share, an increase of 8.3% on the
prior year.
-- During the six months ended 30 June 2025 , Fidelity European Trust PLC
reported a total share price return of +16.7%, while the Benchmark
Index, the FTSE World Europe ex UK , rose +14.3%.
-- The Net Asset Value (NAV) return was +9.6% over the same timeframe.
-- Banks and financials contributed positively to performance during the
period, particularly Bankinter.
-- Subject to shareholder approval, the proposed combination of Fidelity
European Trust PLC and Henderson European Trust PLC will be effective on
26 September 2025 .
Contacts
For further information, please contact:
Company Secretary
01737 836347
Chairman’s Statement
Update on Combination with Henderson European Trust PLC
On
As noted in the announcement there will be no changes to the existing investment objective or policy with the experienced and award-winning team of
BENEFITS OF THE COMBINATION
The Board believes that, if implemented, the Combination will result in a number of benefits for both the Company’s and HET’s shareholders, as well as for future investors in the Combined Entity, including:
·
Unparalleled scale and enhanced profile:
The Combined Entity is anticipated to have net assets of circa £2.1 billion. As the flagship
· Lower tiered management fees: Fidelity has agreed that, with effect from completion of the deal, the annual management fee payable by the Combined Entity will be reduced to: 0.70 per cent of net assets up to and including £400 million; 0.65 per cent of net assets in excess of £400 million up to and including £1.4 billion; and 0.55 per cent of net assets in excess of £1.4 billion (the “Revised Fee Arrangements”). 1 This is currently expected to result in a blended annual management fee rate for the Combined Entity of 0.63 per cent of net assets on completion of the Combination.
·
Lower ongoing charges ratio (“OCR”):
Owing to the Revised
· Enhanced liquidity: The scale of the Combined Entity, as the UK’s largest and most liquid European-focused investment trust, is also expected to further enhance secondary market liquidity for the Company’s shareholders (including in relation to its enhanced discount management policy as described further below).
· Significant cost contribution from Fidelity: Fidelity has agreed to make a material contribution towards the costs of the Proposals, equivalent to a waiver of 12 months of management fees that would otherwise be payable in respect of the net assets transferred to the Company from HET. This is expected to offset fully the direct transaction costs for the Company’s existing shareholders.
1 The Company currently pays an annual management fee of 0.85 per cent of net assets up to and including £400 million and 0.65 per cent of net assets in excess of £400 million.
· Enhanced discount management policy: In the light of the Proposals, the Board has decided to enhance its discount management policy such that the Company will seek to maintain any discount to net asset value in mid-single digits in normal market conditions.
I am pleased to note that work to facilitate the combination is progressing smoothly. A Circular to the Company’s shareholders, providing further details of the proposals and notice of a general meeting to be held on
It is intended that, following completion of the Combination,
I believe that the Combination with HET is a highly positive development for the Company with shareholders standing to benefit from lower charges, greater liquidity in the Company’s shares, an enhanced discount management policy, and a higher profile that will contribute towards making it the “go to trust” for investing in
Chairman
Portfolio Managers’ Half-Yearly Review
Performance Review
During the first six months of the year the net asset value (“NAV”) total return was +9.6% compared to a total return of +14.3% for the FTSE World Europe ex
Market Review
Continental European markets rose in the first half of this year, as concerns about possible tariffs on goods exported to the US, were more than offset by the anticipation of several positive drivers. Investors expected the
This optimism regarding the future trajectory of European economic growth, and some concerns regarding the direction of US fiscal policy, also reignited the Euro which appreciated by almost 4% against
Continental European markets have also witnessed a substantial change in leadership in the past few quarters with the banking sector very much in the vanguard, after many years of being in the doldrums, post the Global Financial Crisis (GFC). Many other “value” sectors have also turned around, driven by the factors mentioned above and a sense that a corner has been turned in terms of long-term bond yields (and therefore discount rates). More specifically, defence stocks have rocketed on the expectation of increased orders as European nations show more urgency to raise spending to align with higher
Portfolio Managers’ Report
The Company’s NAV total return lagged the Company’s Benchmark over the six-month period. The gearing of the Company, given rising markets, was a positive contributor but this was more than offset by lacklustre stock-picking. Pleasingly, however, the discount narrowed significantly over the period, such that the share price rose more than the Benchmark.
Novo Nordisk was the main detractor from performance during the period. Its share price suffered a significant de-rating on lower-than-expected prescription growth in the US due to growing competition in the obesity indication from compounding (manufacture and sale of copycat drugs) companies and Eli Lilly. This was exacerbated by the unexpected departure of the CEO, who presumably paid the price for this poor execution in their main market. We now think that this is a very cheap stock, given its prospective dividend growth, and we expect an improved operating performance in the US obesity market, especially as the manufacture and sale of copycat drugs is no longer permitted.
Top Five Stock Contributors (on a relative Sector Country %
basis)
Bankinter Financials Spain +0.7
ABN AMRO Bank Financials Netherlands +0.6
Deutsche Börse Group Financials Germany +0.4
Intesa Sanpaolo Financials Italy +0.3
AXA Financials France +0.3
=========
Top Five Stock Detractors (on a Sector Country %
relative basis)
Novo Nordisk Healthcare Denmark -0.9
Rheinmetall (not held) Industrials Germany -0.6
Partners Group Financials Switzerland -0.6
Puma Consumer Discretionary Germany -0.5
Assa Abloy Industrials Sweden -0.5
=========
Rheinmetall was also a significant detractor relative to the Benchmark Index as it is not held in the Company’s portfolio and, like other defence stocks, it had a meteoric rise during the quarter as investors expect it to benefit from the multi-year increase in defence spending in
Beyond defence, the Company’s lower exposure to German listed stocks versus the Benchmark was a drag on returns. The German DAX was boosted by the announcements on the removal of the fiscal debt break and ambitious infrastructure spending. However, the investment will take time to translate into revenue and profit benefits for German industrial companies, and we feel that the share price moves were overdone for the most part given the uncertainty around which companies will emerge as the ones whose earnings growth accelerates.
Positive contributions were dominated by financials and banks, in particular. Banks continued to be reappraised and rerated by investors on the back of better-than-expected earnings. It appears that the earnings they are now making on deposits will be stickier than anticipated thanks to structural hedges that have been constructed in recent years. Bankinter, the Company’s best performing bank during this period, is also benefiting from market share gains as other banks in
Outlook
We believe that the stimulation of the European economy, initiated by the announcement of Germany’s fiscal stimulus package in
Following the year-to-date rally in European stock markets, the valuation multiples of European quoted companies compared to US quoted companies are no longer at historic lows. However, generally, such European companies still trade on a valuation discount relative to their US counterparts and there is still some way to go before they return to historic median levels. Noting that some well-known cyclical European businesses have traded at higher valuation levels recently on expectations of earnings improvement, ‘hot money’ chasing this theme could become impatient if these improvements take time to come through.
Whilst there are positive signs, we acknowledge that Europe’s economic growth remains under pressure and therefore cautiously await a cyclical upswing in the region. Falling inflation and lower interest rates could additionally boost corporate capital expenditure and lift consumer confidence.
Portfolio Manager
MARCEL STÖTZEL
Co-Portfolio Manager
Twenty Largest
Holdings as at
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 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
ASML
Technology Hardware and 94,588 5.6 94,588
Equipment
Roche
Pharmaceuticals and 87,182 5.2 87,182
Biotechnology
SAP (shares and long CFD)
Software and Computer Services 86,652 5.1 25,798
Nestlé
Food Producers 71,527 4.2 71,527
Novo Nordisk
Pharmaceuticals and 67,350 4.0 67,350
Biotechnology
TotalEnergies
Oil, Gas and Coal 67,238 4.0 67,238
L’Oréal
Personal Goods 62,748 3.7 62,748
Legrand (shares and long CFD)
Electronic and Electrical 58,573 3.5 23,600
Equipment
Deutsche Börse Group
Investment Banking and Brokerage 52,386 3.1 52,386
Services
AXA
Non-Life Insurance 51,740 3.1 51,740
Intesa Sanpaolo
Banks 49,604 2.9 49,604
Assa Abloy
Construction and Materials 48,930 2.9 48,930
3i Group
Investment Banking and Brokerage 48,905 2.9 48,905
Services
Kone
Industrial Engineering 48,672 2.9 48,672
EssilorLuxottica
Medical Equipment and Services 47,146 2.8 47,146
Sampo
Non-Life Insurance 45,772 2.7 45,772
KBC Group
Banks 45,080 2.7 45,080
Richemont
Personal Goods 42,458 2.5 42,458
Amadeus IT Group
Software and Computer Services 42,029 2.5 42,029
Linde (long CFD)
Chemicals 41,796 2.4 183
--------------- --------------- ---------------
Twenty largest long exposures 1,160,376 68.7 1,022,936
Other long exposures 647,376 38.4 615,958
--------------- --------------- ---------------
Total long exposures before long 1,807,752 107.1 1,638,894
futures2,3
========= ========= =========
Long Futures
EURO STOXX 50 Future September 51,040 3.0 (252)
20253
--------------- --------------- ---------------
Gross Asset Exposure3,4 1,858,792 110.1
========= =========
Portfolio Fair Value5 1,638,642
Net current assets (excluding
derivative assets and 49,102
liabilities)
---------------
Shareholders’ Funds (per Balance 1,687,744
Sheet below)
=========
1 Asset Exposure is expressed as a percentage of Shareholders’ Funds.
2 Total long exposures before long futures comprises investments of £1,638,710,000 and long CFDs of £169,042,000.
3 See Note 13 below.
4 Gross Asset Exposure comprises market exposure to investments of £1,638,710,000 plus market exposure to all derivative instruments of £220,082,000. Derivative instruments comprise long CFDs of £169,042,000 and long futures of £51,040,000.
5 Portfolio Fair Value comprises investments of £1,638,710,000 plus derivative assets of £1,198,000 less derivative liabilities of £1,266,000 (per the Balance Sheet below).
Interim Dividend
As part of their investment process, the 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 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. The Board also closely monitors the liquidity of the Company’s shares as a potential lack of natural buyers in the investment sector may put pressure on discount levels. The
policy seeks to maintain the discount in single digits in normal market circumstances. Following the completion of the proposed combination with Henderson European Trust plc, the Company’s discount management policy will also be enhanced and the Board will seek to maintain the discount to net asset value in mid-single digits in normal market conditions. Buying back shares at a discount also results in an enhancement to 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
Despite an environment of wide discounts across the investment trust industry, the Company’s discount has remained in single digits throughout the reporting period. In order to narrow the discount down even further, the Company repurchased 500,000 ordinary shares into
Principal and Emerging Risks
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; investment performance (including the use of derivatives and gearing); legislation, taxation and regulatory; marketplace and competition; cybercrime and information security; business continuity; key person and operational support; discount control; and environmental, social and governance (ESG) risks. Information on each of these risks is given on pages 24 to 27 in the Strategic Report section of the Annual Report for the year ended
The principal risks and uncertainties remain the same as those at the last year end, but the magnitude of their uncertainty continues to change. There continues to be geopolitical tensions and economic and market events. The fast-changing global geopolitical landscape is largely shaped by the ongoing armed conflicts effects, deglobalisation trends, increasing tariffs 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.
In recent months, there has been increased concerns around investment cost disclosure and its impact on the industry. There is a risk that the FCA’s proposed
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.
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 a changing pattern of weather events. 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 into the Company’s investment process. The Board will continue to monitor how this may impact the Company as a risk on investment valuations and potentially affect shareholder returns.
The Board and the Manager are also monitoring the emerging risks and rewards posed by the rapid advancement of artificial intelligence (“AI”) and technology and how this may threaten the Company’s activities and its potential impact on the portfolio and investee companies. AI can provide asset managers with 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 computer 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.
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 2027.
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:
· 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 104: Interim Financial Reporting; and
· the Chairman’s Statement and the Portfolio Manager’s 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 2025 Six months ended 30 June 2024 Year ended 31 December 2024
unaudited unaudited audited
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Gains/
(losses) on – 86,503 86,503 – 76,095 76,095 – (47,301) (47,301)
investments
Gains on
derivative – 31,371 31,371 – 21,012 21,012 – 35,423 35,423
instruments
Income 4 41,327 – 41,327 41,081 – 41,081 53,670 – 53,670
Investment
management 5 (1,446) (4,337) (5,783) (1,437) (4,311) (5,748) (2,878) (8,634) (11,512)
fees
Other (494) – (494) (521) – (521) (1,063) – (1,063)
expenses
Foreign
exchange – 2,158 2,158 – (1,577) (1,577) – (2,956) (2,956)
gains/
(losses)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/
(loss) on
ordinary
activities 39,387 115,695 155,082 39,123 91,219 130,342 49,729 (23,468) 26,261
before
finance
costs and
taxation
Finance 6 (956) (2,870) (3,826) (1,488) (4,463) (5,951) (2,770) (8,309) (11,079)
costs
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/
(loss) on
ordinary 38,431 112,825 151,256 37,635 86,756 124,391 46,959 (31,777) 15,182
activities
before
taxation
Taxation on
return/
(loss) on 7 (2,330) – (2,330) (3,391) – (3,391) (4,422) – (4,422)
ordinary
activities
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Net return/
(loss) on
ordinary
activities 36,101 112,825 148,926 34,244 86,756 121,000 42,537 (31,777) 10,760
after
taxation
for the
period
========= ========= ========= ========= ========= ========= ========= ========= =========
Return/
(loss) per 8 8.84p 27.62p 36.46p 8.38p 21.22p 29.60p 10.41p (7.78p) 2.63p
ordinary
share
========= ========= ========= ========= ========= ========= ========= ========= =========
The Company does not have any other comprehensive income. Accordingly, the net return/(loss) 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 shareholders’
capital account reserve reserve reserve funds
Notes £’000 £’000 £’000 £’000 £’000 £’000
Six months
ended 30 June
2025
(unaudited)
Total
shareholders’ 10,411 58,615 5,414 1,440,810 47,879 1,563,129
funds at 31
December 2024
Repurchase of
ordinary 11 – – – (1,831) – (1,831)
shares into
Treasury
Net return on
ordinary
activities – – – 112,825 36,101 148,926
after
taxation for
the period
Dividend paid
to 9 – – – – (22,480) (22,480)
shareholders
--------------- --------------- --------------- --------------- --------------- ---------------
Total
shareholders’ 10,411 58,615 5,414 1,551,804 61,500 1,687,744
funds at 30
June 2025
========= ========= ========= ========= ========= =========
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
========= ========= ========= ========= ========= =========
Year ended 31
December 2024
(audited)
Total
shareholders’ 10,411 58,615 5,414 1,472,587 40,452 1,587,479
funds at 31
December 2023
Net
(loss)/return
on ordinary
activities – – – (31,777) 42,537 10,760
after
taxation for
the year
Dividends
paid to 9 – – – – (35,110) (35,110)
shareholders
--------------- --------------- --------------- --------------- --------------- ---------------
Total
shareholders’ 10,411 58,615 5,414 1,440,810 47,879 1,563,129
funds at 31
December 2024
========= ========= ========= ========= ========= =========
Balance
Sheet as at
Company Number 2638812
30 June 31 December 30 June
2025 2024 2024
unaudited audited unaudited
Notes £’000 £’000 £’000
Fixed assets
Investments 10 1,638,710 1,487,772 1,626,177
--------------- --------------- ---------------
Current assets
Derivative instruments 10 1,198 – 5,348
Debtors 13,604 9,506 13,404
Amounts held at futures
clearing houses and 3,708 10,078 4,545
brokers
Cash and cash equivalents 33,148 63,042 42,633
--------------- --------------- ---------------
51,658 82,626 65,930
========= ========= =========
Current liabilities
Derivative instruments 10 (1,266) (5,796) (2,615)
Other creditors (1,358) (1,473) (1,409)
--------------- --------------- ---------------
(2,624) (7,269) (4,024)
========= ========= =========
Net current assets 49,034 75,357 61,906
========= ========= =========
Net assets 1,687,744 1,563,129 1,688,083
========= ========= =========
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 1,551,804 1,440,810 1,559,343
Revenue reserve 61,500 47,879 54,300
--------------- --------------- ---------------
Total shareholders’ funds 1,687,744 1,563,129 1,688,083
========= ========= =========
Net asset value per 12 413.43p 382.44p 413.01p
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
30.06.25 30.06.24 31.12.24
unaudited unaudited audited
£’000 £’000 £’000
Investment income
Overseas dividends 36,792 33,375 42,870
UK dividends 1,228 957 1,654
--------------- --------------- ---------------
38,020 34,332 44,524
========= ========= =========
Derivative income
Income recognised from futures 1,174 1,659 2,468
contracts
Dividends received on long CFDs 1,614 3,536 3,972
Interest received on CFDs – 180 329
--------------- --------------- ---------------
2,788 5,375 6,769
========= ========= =========
Investment and derivative income 40,808 39,707 51,293
========= ========= =========
Other interest
Interest received on bank
deposits, collateral and money 519 1,342 2,323
market funds
Interest received on tax – 32 54
reclaims
--------------- --------------- ---------------
519 1,374 2,377
========= ========= =========
Total income 41,327 41,081 53,670
========= ========= =========
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 2025
(unaudited)
Investment management fees 1,446 4,337 5,783
--------------- --------------- ---------------
Six months ended 30 June 2024
(unaudited)
Investment management fees 1,437 4,311 5,748
--------------- --------------- ---------------
Year ended 31 December 2024
(audited)
Investment management fees 2,878 8,634 11,512
========= ========= =========
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 2025
(unaudited)
Interest paid on bank deposits 32 98 130
and collateral
Interest paid on CFDs 664 1,993 2,657
Costs recognised from futures 260 779 1,039
contracts
--------------- --------------- ---------------
956 2,870 3,826
========= ========= =========
Six months ended 30 June 2024
(unaudited)
Interest paid on bank deposits 7 22 29
and collateral
Interest paid on CFDs 1,145 3,435 4,580
Costs recognised from futures 336 1,006 1,342
contracts
--------------- --------------- ---------------
1,488 4,463 5,951
========= ========= =========
Year ended 31 December 2024
(audited)
Interest paid on bank deposits 15 43 58
and collateral
Interest paid on CFDs 2,122 6,367 8,489
Costs recognised from futures 633 1,899 2,532
contracts
--------------- --------------- ---------------
2,770 8,309 11,079
========= ========= =========
Finance costs have been allocated 75% to Capital reserve in accordance with the Company’s accounting policies.
7 Taxation on Return/(Loss) on Ordinary Activities
Six months Six months Year
ended
ended ended 31.12.24
30.06.25 30.06.24 audited
unaudited unaudited £’000
£’000 £’000
Overseas taxation 2,330 3,391 4,422
========= ========= =========
8 Return/(Loss) per Ordinary Share
Six months Six months Year
ended ended ended
30.06.25 30.06.24 31.12.24
unaudited unaudited audited
Revenue return per ordinary 8.84p 8.38p 10.41p
share
Capital return/(loss) per 27.62p 21.22p (7.78p)
ordinary share
--------------- --------------- ---------------
Total return per ordinary share 36.46p 29.60p 2.63p
========= ========= =========
The return/(loss) per ordinary share is based on the net return/(loss) on ordinary activities after taxation for the period divided by the weighted average number of ordinary shares held outside of
£’000 £’000 £’000
Net revenue return on ordinary 36,101 34,244 42,537
activities after taxation
Net capital return/(loss) on
ordinary activities after 112,825 86,756 (31,777)
taxation
--------------- --------------- ---------------
Net total return on ordinary 148,926 121,000 10,760
activities after taxation
========= ========= =========
Number Number Number
Weighted average number of ordinary shares 408,505,385 408,730,523 408,730,523
held outside Treasury during the period
========== ========== ==========
9 Dividends Paid to Shareholders
Six months Six months Year
ended ended ended
30.06.25 30.06.24 31.12.24
unaudited unaudited audited
£’000 £’000 £’000
Final dividend of 5.50 pence per
ordinary share paid for the year 22,480 – –
ended 31 December 2024
Interim dividend of 3.60 pence
per ordinary share paid for the – – 14,714
year ended 31 December 2024
Final dividend of 4.99 pence per
ordinary share paid for the year – 20,396 20,396
ended 31 December 2023
--------------- --------------- ---------------
22,480 20,396 35,110
========= ========= =========
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 2025 £’000 £’000 £’000 £’000
(unaudited)
Financial assets
at fair value
through profit
or loss
Investments 1,638,710 – – 1,638,710
Derivative
instrument – 1,198 – 1,198
assets
--------------- --------------- --------------- ---------------
1,638,710 1,198 – 1,639,908
========= ========= ========= =========
Financial
liabilities at
fair value
through profit
or loss
Derivative
instrument (252) (1,014) – (1,266)
liabilities
========= ========= ========= =========
Level 1 Level 2 Level 3 Total
31 December 2024 £’000 £’000 £’000 £’000
(audited)
Financial assets
at fair value
through profit
or loss
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 (1,121) (4,675) – (5,796)
liabilities
========= ========= ========= =========
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
========= ========= ========= =========
11 Share Capital
30 June 2025 31 December 2024 30 June 2024
unaudited audited unaudited
Nominal Nominal Nominal
Number of value Number of Value Number of value
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 (500,000) (13) – – – –
into
Treasury
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
End of the 408,230,523 10,205 408,730,523 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 500,000 13 – – – –
into
Treasury
----------------- ----------------- ----------------- ----------------- ----------------- -----------------
End of the 8,217,387 206 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, the Company repurchased 500,000 (year ended
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
30.06.25 31.12.24 30.06.24
unaudited audited unaudited
Total shareholders’ funds £1,687,744,000 £1,563,129,000 £1,688,083,000
Ordinary shares held outside of 408,230,523 408,730,523 408,730,523
Treasury at the period end
Net asset value per ordinary share 413.43p 382.44p 413.01p
============ ============ ============
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 2025
(unaudited)
Investments 1,638,710 97.1 1,638,710 97.1
Long CFDs 169,042 10.0 169,042 10.0
Long futures 51,040 3.0 51,040 3.0
--------------- --------------- --------------- ---------------
Total long 1,858,792 110.1 1,858,792 110.1
exposures
Short CFDs – – – –
--------------- --------------- --------------- ---------------
Gross asset
exposure/net 1,858,792 110.1 1,858,792 110.1
market exposure
========= ========= ========= =========
Shareholders’ 1,687,744 1,687,744
funds
========= =========
Gearing2 10.1 10.1
========= =========
31 December 2024
(audited)
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 1,739,174 111.3 1,739,174 111.3
exposures
Short CFDs – – – –
--------------- --------------- --------------- ---------------
Gross asset
exposure/net 1,739,174 111.3 1,739,174 111.3
market exposure
========= ========= ========= =========
Shareholders’ 1,563,129 1,563,129
funds
========= =========
Gearing2 11.3 11.3
========= =========
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
========= =========
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.
14 Transactions with the Manager and Related Parties
During the period, the Company had the following transactions payable to FII:
Six months Six months Year
ended
ended ended 31.12.24
30.06.25 30.06.24 audited
unaudited unaudited £’000
£’000 £’000
Portfolio management services 5,783 5,748 11,512
Marketing services 124 116 221
========= ========= =========
At the Balance Sheet date, the following balances payable to FII were accrued and included in other creditors:
Six months Year Six months
ended
ended 31.12.24 ended
30.06.25 audited 30.06.24
unaudited £’000 unaudited
£’000 £’000
Portfolio management services 1,004 972 970
Marketing services 39 53 55
========= ========= =========
As at
The annual fee structure from
2025
£’000
Chairman 50,000
Senior Independent Director 36,500
Chair of the Audit Committee 39,000
Director 32,500
=========
As at
Six months
ended
30.06.25
unaudited
Fleur Meijs 28,970
Milyae Park 12,300
Sir Ivan Rogers 8,749
Davina Walter 60,067
Paul Yates 32,000
=========
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.
