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FIDELITY
EUROPEAN
TRUST PLC
Annual Report for the year ended 31 December 2025
Fidelity European Trust PLC
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Annual Report 2025
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Fidelity European Trust PLC aims
to be the cornerstone long-term
investment of choice for those
seeking European equity exposure
across market cycles.
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 Objective and Overview
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.
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At a Glance
Fidelity European Trust PLC
|
Annual Report 2025
2021
2022
2023
2024
2025
Net Asset Value per Ordinary Share total return
1, 2
+23.5%
+16.2%
+0.5%
+17.5%
Year ended 31 December
-3.6%
2021
2022
2023
2024
2025
Ordinary Share Price total return
1, 2
+15.3%
+21.1%
Year ended 31 December
+21.7%
-3.8%
-0.1%
0.0
2.0
4.0
6.0
8.0
10.0
20212022202320242025
Dividends per Ordinary Share
9.90p
6.83p
9.10p
7.70p
Year ended 31 December
8.25p
-10 10 30
2021
2022
2023
2024
2025
FTSE World Europe ex UK Index total return
1, 3
+15.7%
+3.0%
+27.9%
Year ended 31 December
+17.4%
-7.0%
1 Includes reinvested income.
2 Alternative Performance Measures. See pages 83 and 84.
3 The Company’s Benchmark Index.
As at 31 December 2025
Shareholders’ Funds
£2,221.2m (2024: £1,563.1m)
Market Capitalisation
£2,129.8m (2024: £1,438.7m)
Capital Structure
Ordinary Shares of 2.5 pence held outside of Treasury
511,345,955 (2024: 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 bank borrowings and 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 16.2%
and the ordinary share price increased by 21.1%, whilst the Benchmark Index increased by
27.9% (all performance data on a total return basis).
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2025 2024
Assets at 31 December
Gross Asset Exposure
1
£2,436.5m £1,739.2m
Gross Gearing
2
(see Note 19 on page 81) 9.7% 11.3%
Net Market Exposure £2,436.5m £1,739.2m
Net Gearing
2
(see Note 19 on page 81) 9.7% 11.3%
Shareholders’ Funds £2,221.2m £1,563.1m
Net Asset Value (“NAV”) per Ordinary Share
2
434.39p 382.44p
Ordinary Share Price and Discount at 31 December
Ordinary Share Price at year end 416.50p 352.00p
Ordinary Share Price – year high 431.00p 411.00p
Ordinary Share Price – year low 338.50p 340.00p
Discount at year end
2
4.1% 8.0%
Discount – year high 9.9% 10.0%
Discount – year low 0.2% 2.5%
Results for the year ended 31 December – see page 59
Revenue Return per Ordinary Share
2
11.30p 10.41p
Capital Return/(Loss) per Ordinary Share
2
51.50p (7.78p)
Total Return per Ordinary Share
2
62.80p 2.63p
Final Dividend proposed per Ordinary Share 6.00p 5.50p
Interim Dividend paid per Ordinary Share 3.90p 3.60p
Total Dividends for the year 9.90p 9.10p
Ongoing Charges Ratio for the year ended 31 December
2, 3
0.73% 0.76%
Fee waived in respect of the combination with Henderson European Trust plc (0.14%) –
Ongoing Charges Ratio including fee waived for the year ended 31 December
2,3
0.59% 0.76%
1 The value of the portfolio exposed to market price movements.
2 Alternative Performance Measures. See pages 83 and 84.
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). It is defined in the Glossary of Terms on page 94.
Total Return Performance
1
(%)
+16.2
+21.1
+27.9
+37.2
+39.6
+52.4
+63.3
+63.5
+66.5
+197.9
+205.8
+177.4
NAV per Ordinary Share
Ordinary Share Price
FTSE World Europe ex UK Index
10 years ended
31 December 2025
5 years ended
31 December 2025
3 years ended
31 December 2025
1 year ended
31 December 2025
Financial Highlights
1
See Glossary of Terms on page 95.
Sources: Fidelity and Datastream.
Past performance is not a guide to future returns.
Fidelity European Trust PLC
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Annual Report 2025
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Annual Report 2025
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Contents
Strategy
Chairman’s Statement 02
Portfolio Managers’ Review 07
Spotlight on the Top 10 Holdings 13
Portfolio Listing 15
Distribution of the Portfolio 17
Attribution Analysis 19
Ten Year Record 20
Summary of Performance Charts 21
Strategic Report 23
Governance
Board of Directors 33
Directors’ Report 35
Corporate Governance Statement 39
Directors’ Remuneration Report 43
Statement of Directors’ Responsibilities 47
Report of the Audit Committee 48
Financial
Independent Auditor’s Report 51
Income Statement 59
Statement of Changes in Equity 60
Balance Sheet 61
Notes to the Financial Statements 62
Alternative Performance Measures 83
Financial Calendar 85
Information for Shareholders
Notice of Meeting 86
Shareholder Information 90
Data Protection 92
Glossary of Terms 93
Alternative Investment Fund Manager’s Disclosure 96
Chairman’s Statement
Read more on pages 02 to 06
Spotlight on the Top 10 Holdings
Read more on pages 13 and 14
Ordinary Share Price as at 31 December
2023
2024
2025
360.00p
352.00p
416.50p
Ten Year Record
Read more on page 20
Portfolio Managers’ Review
Read more on pages 07 to 12
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Fidelity European Trust PLC
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Annual Report 2025
Chairman’s Statement
This is my first Annual Report for the Company, having
joined the Board of Directors in November 2024 and
taken over as Chairman from Vivian Bazalgette at the
last AGM in May 2025. On behalf of the Board and our
shareholders, I would like to place on record our thanks to
Vivian, who became Chairman following the 2016 AGM,
for his strong leadership and invaluable contribution to the
Company’s strategy which has helped sustain its successful
returns to shareholders over the long-term.
2025 proved to be another busy year, not just on the world
political stage and in European financial markets, but also
for your Company given the combination with Henderson
European Trust plc (“HET”), which completed in late
September. The considerable benefits of the combination
are set out below, but first I would like to extend a very
warm welcome to former HET shareholders, who I hope
will remain happy shareholders of this Company for many
years to come.
While European stock market performance in 2024 was
muted as a result of geopolitical and macroeconomic
concerns, 2025 saw strong returns despite some of the
previous year’s fears – notably, higher US trade tariffs –
becoming reality. In a more fractious global environment,
Europe turned to self-help measures, such as the European
Central Bank (ECB) interest rate cuts and wide-ranging
fiscal stimulus in Germany, leading to an appreciation in
the Euro and a tailwind for more cyclically sensitive stocks.
As discussed below and in the Portfolio Managers’ Review
that follows, the nature of the Company’s investment
philosophy is to seek companies based on four key
criteria: attractive valuations, disciplined use of capital;
cash generation; and strong balance sheets to ensure
the ability to grow dividends. This means that periods
characterised by sharp, momentum-led or cyclical rallies,
such as those experienced in 2025, can act as a headwind
for a portfolio that prioritises sustainable cash generation
and downside resilience.
Performance
For the year ended 31 December 2025, your Company
delivered a net asset value (“NAV”) total return of 16.2% in
sterling, which, while a good outcome in absolute terms,
was significantly behind the 27.9% total return from the
Benchmark Index, the FTSE World Europe ex UK Index in
sterling terms. With the discount to NAV having narrowed
appreciably during the year, the share price total return
was higher, at 21.1%.
Sam and Marcel give a detailed picture of the
contributors to and detractors from performance in their
Portfolio Managers’ Review on the following pages.
In brief, however, some of the factors underlying the
underperformance against the Benchmark Index include
holding Danish pharmaceutical firm Novo Nordisk through
I am pleased to present the
Annual Report of Fidelity European
Trust PLC for the year ended
31 December 2025.
Davina Walter, Chairman
£2,221.2m
(As at 31 December 2025)
Shareholders’ Funds
+16.2%
(Year ended 31 December 2025)
Net Asset Value per Ordinary Share total return
+21.1%
(Year ended 31 December 2025)
Ordinary Share Price total return
+27.9%
(Year ended 31 December 2025)
Benchmark Index total return
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Annual Report 2025
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
a period of poor news flow; being underweight in defence
stocks, which they see as more than pricing in increased
European defence spending; and preferring France to
more highly favoured Germany, albeit with a skew towards
global companies that are less exposed to the French
domestic economy. However, perhaps more important
than all of these has been investor enthusiasm for a
narrow number of stocks that do not necessarily share the
combination of attractive starting valuations and long-term
capital and income growth potential that your Portfolio
Managers favour.
Over the longer-term, performance remains consistent,
averaging 10-13% per annum for both the NAV and share
price total return over three, five and 10 years, since Sam’s
appointment in 2011 and since the Company’s launch
in 1991. We have also matched or outperformed the
Benchmark Index return over 10 years, as well as beating
the average return of the AIC Europe peer group over
three, five and 10 years (and in NAV terms over one year).
Combination with Henderson European Trust plc
Following the resignation of HET’s portfolio managers
in January 2025 and consultation with shareholders, the
Board of HET (which itself was formed through the merger
of Henderson EuroTrust plc (“HNE”) and Henderson
European Focus Trust plc (“HEFT”) in 2024), undertook a
comprehensive review of its options and a competitive
pitch process, leading to the recommendation in June of
a combination with Fidelity European Trust PLC (“FEV”).
Through combining the two largest investment companies
in the Association of Investment Companies’ (“AIC”) Europe
sector, the proposal sought to create a market-leading
European equity investment enjoying the benefits of scale
and enhanced liquidity with continuity of investment style,
given both trusts’ focus on quality companies at attractive
valuations. HET shareholders were offered the choice of
new FEV shares or a cash exit of up to 33%, and it was
pleasing to note that the cash option was undersubscribed,
with less than 30% electing to take the cash element. The
deal completed on 29 September 2025, resulting in the
issuance of 111,902,155 shares in the Company.
The proposals for the combination were covered in detail
in the Half Year Report for the six months ended 30 June
2025, but now that it has taken place, it is worth revisiting
some of the benefits.
• Increased scale: Your company now has net assets of
more than £2bn, placing it in the top 10 by assets of
all equity investment companies. While this may seem
to have limited relevance for individual shareholders,
consolidation in the wealth management market –
historically a key source of demand for investment
trust shares – means investment companies now need
significant scale to make it on to centralised buy lists,
given the large sums at work and the need to maintain
liquidity, which can be challenging for investors who
account for a significant proportion of a company’s
share register. As one of the larger companies in the
FTSE 250 Index, we can also enjoy greater demand
from index-tracking funds.
• Lower management fees and ongoing charges:
Fidelity agreed, with effect from completion of the HET
deal, a reduction in its tiered annual management
fee to: 0.70% on net assets up to £400m, 0.65% on net
assets from £400m to £1.4bn and 0.55% on net assets
in excess of £1.4bn. This revised fee has resulted in
a blended annual management fee rate of 0.62%
based on net assets as at 31 December 2025. The
lower management fee, together with economies of
scale (meaning fixed costs are spread over a larger
base), is feeding into a reduced ongoing charges
ratio (“OCR”). For the year under review, the OCR
was 0.73% (2024: 0.76%) and reflecting the revised fee
arrangement together with the economies of scale the
OCR going forward is 0.68%.
• Enhanced discount management policy: The Board
proposed an enhancement to the Company’s discount
management policy with the aim of maintaining
any share price discount to NAV in mid-single digits
(previously below 10%) in normal market conditions.
The steps taken to manage the discount are discussed
in a separate section on the next page.
• Governance benefits: As part of the combination,
we welcomed two new Directors to the Board:
Vicky Hastings, formerly chairman of HET and its
predecessor HEFT, and Rutger Koopmans, who was
a director of HNE before joining the HET board. As
well as providing continuity for former HET (as well as
HEFT and HNE) shareholders, Vicky, with her strong
investment management background, and Rutger,
a Dutch national with a wealth of experience as a
financial professional, are strong additions to the
Company’s Board.
Dividends
Sustainable and growing dividends are a key feature
your Portfolio Managers seek when analysing potential
holdings for your Company’s portfolio. The Board has
a policy whereby it seeks to deliver a progressive
dividend in normal circumstances, paid twice yearly in
order to smooth dividend payments for the reporting
year. We understand that dividends are also important
to our shareholders, which is why your Company has
increased its annual payout for the past 14 years, placing
it among the AIC’s ‘next generation of dividend heroes’
(investment companies with more than 10 but fewer than
20 consecutive years of annual dividend growth).
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Fidelity European Trust PLC
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Annual Report 2025
In the year under review, the Company’s revenue return
was 11.30 pence per ordinary share (2024: 10.41 pence)
and an interim dividend of 3.90 pence per share was
paid on 23 October 2025 (an increase of 8.3% on the 3.60
pence paid for the same period in 2024). The Board is
pleased to recommend a final dividend of 6.00 pence for
the year ended 31 December 2025 (2024: 5.50 pence),
bringing the total dividend for the year to 9.90 pence
(2024: 9.10 pence), an increase of 8.8% and a 15th
consecutive annual dividend increase.
Subject to approval by shareholders at the Annual General
Meeting (“AGM”) on 12 May 2026, the final dividend will
be paid on 19 May 2026 to shareholders on the register
at close of business on 27 March 2026 (ex-dividend date
26 March 2026). Shareholders may choose to reinvest their
dividends for additional shares in the Company.
Discount Management and Treasury Shares
The success of the enhanced discount management policy
(see Combination with HET on the previous page) can
be seen in the narrowing of the discount to NAV during
the year, from 8.0% at the beginning of the year to 4.1%
as at 31 December 2025. Having previously sought to
maintain the discount in single figures, the policy now is
to maintain a maximum discount in the mid-single digits in
normal market conditions. For the majority of 2025, even
before the proposed combination with HET, the discount
to NAV was in mid or low single digits, with a low of 0.2%
in November, having seen a high of 9.9% at the start of
the year.
During the year, a total of 9,286,723 shares were
repurchased into Treasury (2024: nil), equal to 2.2% of the
shares in issue at the beginning of the year.
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 (which numbered 17,004,110 at the
year end) 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. As buying back shares
at a discount to NAV is accretive, the Board is seeking
shareholder approval to renew this authority at the AGM
on 12 May 2026.
Chairman’s Statement continued
Gearing
The Company continues to gear mainly through the use
of derivative instruments, primarily contracts for difference
(CFDs). However, as part of the combination with HET, the
Company acquired a small amount of fixed gearing €35m
at par value in the form of two very long-term private loan
notes at a particularly attractive blended interest rate
of only 1.57%. Having this element of structural gearing
provides the Company with a degree of diversification in
its counterparty risk, as well as potentially allowing Sam
and Marcel to take a longer-term view on some of their
geared positions.
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 company structure. As
at 31 December 2025, the Company’s gross gearing was
9.7% (2024: 11.3%), with net gearing also at 9.7% (2024:
11.3%). In the reporting year, gearing was maintained
within the limits set by the Board and made a positive
contribution to NAV performance, as can be seen from the
Attribution Analysis table on page 19.
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.
Due diligence trip to Norway
Towards the end of the reporting year, the Board had the
opportunity to visit Oslo with your Portfolio Managers, and
we were privileged to be invited to observe a meeting with
the senior management of DNB Bank, one of Norway’s
leading financial institutions. One of Fidelity’s great
strengths is the depth of its analyst team, with 38 analysts
devoted to the European stock market. It was fascinating to
see one of the analyst team interacting with Sam, Marcel
and DNB, and gave us great confidence both in the
calibre of the team and the respect they command in the
market.
Board of Directors
As mentioned on the previous page, I joined the
Company’s Board in November 2024 and assumed the
role of Chairman on the retirement of Vivian Bazalgette at
the AGM in May 2025. Also new to the Board are Vicky
Hastings and Rutger Koopmans, who joined as part of the
combination with HET. Whilst Rutger has already served
nine years, having been a director of HNE from 2016 until
it merged with HEFT to become HET in 2024, the Board
feels that it is important to extend his tenure to give him a
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Annual Report 2025
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
full year of representing HET (and HNE) shareholders and
the intention therefore is that Rutger will retire at the AGM
in May 2027.
Paul Yates, Senior Independent Director, has served on
your Company’s Board since 2017, and will retire at the
AGM on 12 May 2026. Paul has considerable experience
in investment management and investment trusts, both
valuable assets during his tenure and his contribution to
the Board will be greatly missed. In respect of skills that
we will lose when Paul retires, Vicky’s appointment will
give us continuity in this regard with her strong background
in investment management.
Fleur Meijs, Chair of the Audit Committee, will have
completed nine years on the Board in September 2026
and will therefore not seek re-election at the AGM in May
2027. A recruitment process to appoint her replacement
will be conducted later this year.
Following the AGM at which Paul retires, the Board will
reduce to six Directors and then become five following the
2027 AGM when Rutger and Fleur retire.
Annual General Meeting
The Company’s AGM will be held at 11.00 am on 12 May
2026 at 4 Cannon Street EC4M 5AB and virtually via the
online Lumi AGM meeting platform.
The AGM provides a great opportunity for shareholders to
hear first-hand from your Portfolio Managers and to meet
the Company’s Directors, and of course, for us to meet you.
We hope to see as many of you as possible on the day.
Full details of the AGM are below.
Outlook
After a year of strong performance, with markets having
risen significantly, many investors in Europe are looking for
further progress supported by potential productivity gains,
interest rate cuts, continued fiscal stimulus and a belief that
‘the worst is over’ in relation to US trade tariffs. This has
led to a meaningful improvement in corporate earnings
expectations from the flat outlook anticipated for 2025.
While the path ahead may not be linear in these uncertain
times, our team believe the portfolio is well positioned
through its focus on high-quality, cash-generative
businesses with strong balance sheets.
Davina Walter
Chairman
17 March 2026
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Fidelity European Trust PLC
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Annual Report 2025
ANNUAL GENERAL MEETING – TUESDAY, 12 MAY 2026 AT 11.00 AM
The AGM of the Company will be held at 11.00 am on Tuesday, 12 May 2026 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 86 to 89.
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 88 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 in Note 9 to the Notes to the Notice of Meeting on
page 88. 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://meetings.lumiconnect.com from your web browser on a tablet or computer, you will need to
enter the Lumi Meeting ID which is 100-968-191-255. 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.
Further information on how to vote across the most common investment platforms is available at the following
link: https://www.theaic.co.uk/how-to-vote-your-shares
Chairman’s Statement continued
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
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
1 December 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 and now also acts as Portfolio
Manager alongside Sam Morse.
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,
Portfolio Manager
Sam Morse,
Portfolio Manager
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Annual Report 2025
Question
How has the Company performed over the
year to 31 December 2025, both in absolute
terms and relative to its Benchmark Index?
Answer
The Company delivered a positive double-digit return in
absolute terms in 2025, but underperformed its Benchmark
Index, the FTSE World Europe ex UK Index. Over the year
to 31 December 2025, the net asset value (“NAV”) rose
16.2%. Thanks to a narrowing of the discount, the total
return to shareholders was 21.1% but this still lagged
the Benchmark Index which climbed by 27.9% on a total
return basis.
This outcome partly reflects the Company’s investment
approach, which means it can lag in strong, fast-moving
‘risk-on’ markets like we saw in 2025 following Germany’s
fiscal stimulus announcement. Periods characterised by
sharp, momentum-led or cyclical rallies, can act as a
headwind for our portfolio that prioritises sustainable cash
generation and downside resilience.
Question
What were the principal drivers of
performance in 2025, and to what extent
was this driven by stock selection versus
geographic or sector allocation?
Answer
After sustained outflows for the asset class between 2022
and 2024, European equity funds recorded renewed
inflows in 2025, as investors diversified away from a US
market which had become highly concentrated on a
number of expensive technology stocks. A weaker US
dollar further enhanced the appeal of non-US assets.
The Company’s strategy is to be ‘benchmark-aware’, with
relatively tight controls around sector exposures. As a
result, we usually expect performance to be predominantly
driven by stock selection rather than sector or geographic
allocation, with relative returns largely determined
by company-specific outcomes. In 2025, however,
performance was influenced to some extent by the
prevailing market environment, which favoured cyclical and
value-oriented stocks following the announcement of fiscal
stimulus in Germany. Unfortunately, the relative contribution
from stock selection was also negative and so did not
offset the stylistic headwinds. The Company’s gearing
contributed positively to absolute returns in a strong market
(see the Attribution Analysis table on page 19).
European equity markets were characterised by sharp,
value-led and cyclical rallies, with areas such as defence,
peripheral banks and German cyclicals leading the
market. The Company’s emphasis on quality businesses,
sustainable dividend growth and downside resilience
meant that it was underweight in many of these segments,
and this acted as a drag on relative performance.
Limited exposure to defence stocks such as Rheinmetall
detracted following announcements of increased European
defence spending. In addition, holdings including health
care company Novo Nordisk and chemicals producer
Symrise, detracted on company-specific developments,
while software businesses SAP and Dassault Systèmes
came under pressure amid weaker software spending
and uncertainty around the competitive implications of AI
adoption. Despite these near-term headwinds, we believe
the long-term fundamentals of most of these companies
remain intact and valuations are now attractive relative to
their prospects.
Stocks in the financials’ sector, including Bankinter, ABN
AMRO Bank, KBC Group, and Intesa Sanpaolo, were the
top contributors to performance as they delivered strong
earnings and re-rated amid rising European bond yields
and German fiscal spending plans. However, not holding
peripheral banks, including UniCredit, Banco Santander
and BBVA, proved costly as were our investments in private
equity holdings Partners Group Holding and 3i Group.
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) %
Bankinter +1.3
ABN AMRO Bank +1.2
KBC Group +0.7
Intesa Sanpaolo +0.7
ASML +0.6
Top 5 Stock Detractors (on a relative basis) %
Novo Nordisk -1.7
Symrise -1.3
Partners Group Holding -1.1
SAP -1.0
Dassault Systèmes -1.0
Portfolio Managers’ Review continued
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
of total net assets (a gearing level of 30%). As part of the
combination with HET, the Company now has unsecured
borrowings of 1.53% Series A senior notes 2047 and 1.66%
Series B senior notes 2052 of €25m and €10m, respectively.
Question
For new shareholders, could you outline your
bottom-up stock selection approach, and
how this process contributed to performance
over the past year?
Answer
We employ a bottom-up, fundamentally driven investment
approach. The focus is on identifying high-quality European
companies with durable business models, strong balance
sheets and the ability to generate sustainable, and
growing, cash flows and dividends over time.
As active Portfolio Managers, we seek attractively
valued companies that exhibit good long-term structural
growth prospects and can grow dividends sustainably
over the next three to five years. We look for four key
characteristics: positive fundamentals (exemplified by
structural growth prospects, a proven business model, and
disciplined use of capital); the ability to generate cash; a
strong balance sheet; and a compelling valuation.
We invest cautiously, looking to manage the strategy’s
downside risk and build a balanced, fully invested portfolio
that is benchmark aware. Turnover is low, reflecting
the long-term approach. Risk is managed through
diversification and disciplined position sizing.
This approach contributed to performance during the year
through bank holdings such as Bankinter, ABN AMRO Bank,
KBC Group, and Intesa Sanpaolo, which delivered strong
earnings. French industrial group Legrand also performed
well as it saw accelerated growth in its datacentre
business, ongoing strength in underlying organic trends
and positive contributions from recent acquisitions.
Question
European equities performed strongly in
2025, despite ongoing macroeconomic
and geopolitical uncertainty. How are you
assessing the ability of the companies in the
portfolio to deliver sustainable earnings and
dividend growth into 2026 and beyond?
Answer
Although European equities delivered strong absolute
Question
How was the combination with Henderson
European Trust plc? What have been the key
benefits for shareholders of the enlarged
Company, and how smoothly was the
integration of the portfolios and investment
processes executed?
Answer
The combination with Henderson European Trust plc
(“HET”), which became effective on 29 September
2025, followed a comprehensive and competitive review
process initiated after the resignation of HET’s co-portfolio
managers earlier in the year. Supported by its advisers,
the HET Board undertook a formal request-for-proposal
process involving a wide range of potential managers and
consolidation partners. Fidelity’s proposal was ultimately
selected as the option best positioned to deliver long-
term value for shareholders, reflecting the strength of
your Company’s investment capabilities and strategic
positioning.
Following the combination, Fidelity European Trust PLC has
consolidated its position as the largest European equity
investment trust, with a market capitalisation now exceeding
£2 billion. We were delighted to have been chosen after
a competitive tender process, not least for out bottom-up
investment approach, ensuring continuity and stability for
both existing and new shareholders.
The enlarged scale of the Company delivers clear
shareholder benefits. A new tiered management fee
structure and improved operating leverage have resulted in
a material reduction in the ongoing charges ratio. Fidelity
also made a significant contribution to the costs of the
transaction, equivalent to a waiver of twelve months of
management fees on the assets rolling over from HET, which
is expected to fully offset the Company’s direct transaction
costs. The Board has also enhanced the Company’s
discount management policy, with the aim of maintaining
the discount in mid-single digits in normal market conditions.
The integration of the portfolios and investment processes
was executed smoothly and in an orderly manner, with
assets aligned to the Company’s established investment
framework and risk controls. The enlarged Company
continues to operate with its existing capital structure,
including its approach to gearing and loan notes, which
remain subject to Board oversight and are described in
the Financial Statements. The aggregate exposure of the
Company to equities, including from borrowing and the use
of derivatives, but excluding hedging, will not exceed 130%
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and relative performance in 2025, we are conscious that
this occurred alongside earnings downgrades, valuation
expansion and persistent macroeconomic and geopolitical
uncertainty. As we look into 2026 and beyond, our
assessment of the ability of companies in the portfolio
to deliver sustainable earnings and dividend growth
is firmly rooted in bottom-up fundamentals rather than
extrapolating recent market strength. We focus on balance
sheet resilience, cash flow durability, returns on invested
capital and the ability of companies to maintain or grow
dividends across the cycle. Indeed, at the time of writing,
the escalation in the Middle East suggests that a cautious
approach will be prudent.
While not cheap in absolute terms, European equities still
look attractive relative to US equities. Valuations across
nearly all sectors trade at a discount to US peers, often
beyond what differences in growth, margins or returns can
justify. This is also the case if we compare valuations on
an equal weighted basis to remove the skew to the Mag
7 (Mag 7 are the Magnificent Seven major technology
companies that have driven significant stock market growth
over the past decade. The seven companies are Apple,
Microsoft, Amazon, Alphabet, Meta, Nvidia and Tesla). The
equal weight MSCI Europe Index forward price-earnings
ratio trades at a 21.5% discount to the US, compared to
a 25.7% discount on a market cap weighted basis. All
European sectors, except communication services, trade at
a forward price-earnings discount to their US counterparts
on an equal weight basis. This creates an environment
where expectations are low, and companies do not need
especially bullish assumptions to deliver acceptable
outcomes. In several sectors, including financials, health
care, utilities and parts of industrials, European companies
generate earnings and returns comparable to US peers,
yet trade much cheaper, providing a meaningful margin
of safety.
Within the portfolio, we continue to emphasise companies
with strong free cash-flow generation and disciplined
capital allocation, which supports sustainable dividends
even when earnings growth is uneven. This is evident
in holdings such as ASML, which can have cyclicality
in its orders, but remains the world’s leading supplier
of photolithography equipment used in semiconductor
manufacturing. More broadly, the portfolio yield, in
aggregate, is now close to the market yield, which
historically has been a favourable indicator of positive
long-term returns relative to the Benchmark Index, although
it is no guarantee in terms of absolute returns (see chart
above).
Question
Looking back over the year, were there
any material developments or outcomes
that surprised you? If so, did these lead
to changes in portfolio positioning or
investment theses?
Answer
Through 2025, several developments were more surprising
than initially expected. At a market level, the resilience of
European equities stood out, particularly given ongoing
geopolitical tensions, renewed US–EU trade frictions and
political uncertainty across the region. Despite these
headwinds, markets were supported by a soft economic
landing, easing inflation, ECB rate cuts and a meaningful
fiscal pivot towards defence and infrastructure spending.
Portfolio Managers’ Review continued
Portfolio Dividend Yield versus Benchmark Index
Relative Dividend yield
Source: Fidelity International, FactSet, 31 December 2013 to 31 December 2025. Dividend yield (last 12 months) is calculated as last 12 months dividend per share divided
by the stock’s month end price and is representative of the Company. The Benchmark Index is the FTSE World Europe ex UK Index total return.
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
The recovery in investor flows into European equity funds
after several years of outflows was also notable, reflecting
diversification away from relatively expensive and
concentrated US equity exposure.
At the stock level, there were some unexpected outcomes
that prompted reassessment of individual investment
theses. The extent of the setbacks at Novo Nordisk, the
leading global health care company, was one such
example, with disappointing late-stage trial results, pricing
actions in the US, a profit warning and a CEO change all
occurring in quick succession. Given the failure of the latest
clinical trial for the next-generation weight loss drug, our
investment thesis - predicated on Novo’s continued market
dominance - no longer holds. As a result, we have exited
the position.
Towards the end of the year, there was a brief slowdown
in like-for-like sales at Action, the discount retailer owned
by 3i Group, which was a surprise after a prolonged
period of strong performance. However, the weakness was
isolated to one geographic area over a one-month period,
and other segments continued to report strong sales
growth. As such, we are cautious to extrapolate this to a
broader trend and remain constructive on the company.
In other areas, companies such as Symrise, Sika and
Dassault Systèmes, were affected by cyclical weakness,
cautious customer behaviour or softer guidance, which
weighed on share prices. These developments did not
result in wholesale changes to portfolio strategy, but they
did lead to selective adjustments.
Where conviction in the long-term thesis weakened, positions
were exited, including LVMH Moët Hennessy following
a change in dividend policy and some management
departures, as well as Sodexo and PUMA. Conversely, where
near-term disappointment appeared to overshadow intact
long-term fundamentals, we selectively added or maintained
exposure, including in ASML, Dassault Systèmes and Symrise.
Overall, surprises during the year reinforced the importance
of disciplined stock selection and valuation awareness rather
than prompting a change in investment philosophy.
Question
The dividend has increased for fourteen
consecutive years, putting the Company
on the AIC’s ‘next generation’ of dividend
heroes. How do you look at dividends versus
growth when making an investment decision?
Answer
When making investment decisions, dividends are
considered within the context of a company’s overall
cash-generation capability and financial strength, rather
than as a standalone objective. The portfolio focuses on
identifying attractively valued companies with strong long-
term prospects for cash generation and dividend growth,
supported by resilient business models and robust balance
sheets. This reflects the belief that the ability to sustain and
grow dividends over time is closely linked to the durability
and quality of underlying earnings and cash flows.
The portfolio is constructed using a bottom-up approach,
with investment decisions driven by company-specific
fundamentals rather than short-term macroeconomic
considerations. Growth opportunities are therefore
assessed alongside capital discipline and balance-
sheet resilience. Companies such as ASML illustrate this
approach: despite having a low absolute dividend yield,
the dividend has grown for many years thanks to a strong
business model given a monopolistic position in Extreme
Ultraviolet (EUV) lithography machines which are critical for
making the most advanced semiconductors.
The Company’s record of fourteen consecutive years of
dividend growth is a consequence of this disciplined focus
on cash generation and financial strength, rather than
pursuing high yields at the expense of long-term growth.
This discipline has been a key contributor to our long-term
record of income growth and total return, with the AIC also
ranking the Company 13th overall, and the highest placed
European strategy in its list of investment trusts that “would
have made an ISA Millionaire”.
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
European equity markets have demonstrated resilience,
supported by accommodative monetary policy, attractive
relative valuations and a gradual improvement in investor
sentiment. Looking ahead, Europe has the potential to
close its productivity gap with the US by focusing on
technology and innovation and by simplifying business
regulations, as outlined in the Draghi report, although
progress towards greater European integration is expected
to be slow.
Investor expectations for earnings growth have increased,
with markets anticipating an improvement driven by interest
rate reductions, fiscal stimulus - particularly in Germany - and
a belief that the worst of the tariff-related uncertainty is over.
However, there is still tariff uncertainty, inflation remains
stubborn and rising long-term bond yields may offset some
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Annual Report 2025
of the benefits of fiscal stimulus. Expectations are high so
markets appear vulnerable to disappointment from policy
slippage or renewed geopolitical instability. As a result, we
remain cautious on the broader market outlook.
This macro view does not directly correlate with our
assessment of individual companies. European companies
are not simple proxies for the domestic economy, with
roughly two-thirds of revenues generated outside the
region. This global footprint has long been supportive, and
any improvement in domestic European conditions could
provide an additional source of upside. Our investment
philosophy remains unchanged and is anchored in
stock selection, a long-term perspective and capital
preservation. The portfolio is balanced across sectors, with
positioning driven by bottom-up opportunities rather than
macro developments.
We continue to focus on attractively valued companies
with good long-term prospects for cash generation and
dividend growth. Defensive quality is not expensive on
a relative basis, and the portfolio yield is close to the
market yield. Higher rates and extreme factor rotations
have weighed on many of the high-quality, stable-growing
businesses we favour, bringing valuations closer to the
market and creating opportunities. We have also made
a measured increase in exposure to domestic European
revenue streams, reflecting improved structural momentum
around fiscal investment, integration and competitiveness
reform, while remaining consistent with our bottom-up
framework and valuation discipline.
Question
What is the advantage of investing in Fidelity
European Trust PLC?
Answer
The Company’s investment discipline provides resilience,
in absolute terms, across different market environments.
While this disciplined positioning, which is focused on
sustainable dividend growth, can result in periods of
relative underperformance when markets are more
exuberant, it is designed to deliver more consistent long-
term outcomes. The Company’s aim is to outperform
its Benchmark Index by one to two percent per annum
post fees over the long-term. This is supported by the
breadth and depth of Fidelity’s research platform, which
provides a consistent pipeline of high-quality investment
ideas and enables the construction of a fully diversified
portfolio across the market cycle. In addition, the Portfolio
Managers bring deep experience, and Fidelity’s private
ownership allows the firm to take a long-term view in
maintaining organisational stability and supporting
shareholders’ investment objectives.
Portfolio Managers’ Review continued
Question
Looking ahead to 2026 and beyond, which
sectors, themes or regions within Europe are
you most optimistic about, and where do
you see the greatest potential for long-term
outperformance?
Answer
Looking ahead to 2026 and beyond, our optimism is
selective rather than thematic or region wide. The greatest
potential for long-term outperformance lies in areas where
Europe’s valuation discount appears most disconnected
from current fundamentals and where confidence can
continue to rebuild without requiring a strong macro uplift.
Financials are a clear example. European banks are
fundamentally stronger than at any point since the Global
Financial Crisis, with significantly higher capital ratios,
de-risked balance sheets, improved cost efficiency and
structurally higher net interest income. Returns on tangible
equity are now broadly in line with the wider market, and
in some cases, comparable with US peers, yet valuations
continue to reflect historical distrust. As confidence in
the sustainability of these returns grows, financials offer
meaningful upside through dividend, buybacks and
potential valuation normalisation.
More broadly, we see opportunity in high-quality European
companies with strong global franchises, pricing power
and resilient cash flows, particularly where short-term
cyclical weakness or sentiment has created attractive
entry points. This includes selective industrials, software
and health care names, where long-term structural
drivers remain intact, but valuations have adjusted. The
potential for Europe to gradually close its productivity
gap with the US through technology, innovation and
regulatory simplification, as outlined in the Draghi report,
also supports selective exposure to companies enabling
efficiency and digitalisation, even if progress is slow.
At the same time, we remain cautious on areas where
valuations already discount optimistic assumptions around
fiscal stimulus, rate cuts or easing trade tensions. Overall,
we do not rely on a broad European re-rating to generate
returns. Instead, we believe long-term outperformance will
come from disciplined stock selection, exploiting valuation
gaps created by entrenched pessimism and focusing on
companies with durable business models, strong balance
sheets and the ability to compound cash flows and
dividends over time.
Sam Morse Marcel Stötzel
Portfolio Manager Portfolio Manager
17 March 2026 17 March 2026
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Spotlight on the Top 10 Holdings
as at 31 December 2025
(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.)
SAP (Germany)
% of Net Assets
4.1%
SAP is a global leader in enterprise application software, providing mission-critical solutions to many of the
world’s leading multinationals, including companies such as Vodafone, Nestlé, Mercedes-AMG Petronas
and Microsoft. SAP serves around 400,000 customers across more than 100 countries and has a workforce
of over 100,000 employees. Its transition from legacy on-premise systems to high-margin, cloud-based ERP
and business applications centred on SAP S/4HANA Cloud and supported by growing AI-driven analytics,
has been a key driver of recent performance and long-term investment appeal. SAP’s large installed
base, high switching costs and strong cloud backlog provide revenue visibility and resilience, while
continued innovation in cloud and AI underpins a compelling outlook for sustained growth and shareholder
value creation.
ASML (Netherlands)
% of Net Assets
7.0%
ASML has a dominant competitive position as the world’s leading supplier of photolithography systems
for the semiconductor industry and holds an effective monopoly in the most advanced technologies. As
digitalisation accelerates and demand for increasingly sophisticated chips grows, driven by software
proliferation and AI, ASML benefits from a long runway of growth supported by sustained capital
expenditure from leading global customers such as Intel and Samsung. Its monopolistic position confers
strong pricing power, enabling growth ahead of the broader semiconductor equipment market. The
investment case remains underpinned by ASML’s technological leadership, strong financial profile and
exposure to powerful secular growth drivers, with long-term upside potential outweighing near-term risks
related to China and customer concentration.
Industry Technology Hardware and
Equipment
Nestlé (Switzerland)
% of Net Assets
4.3%
Nestlé is the world’s largest food and beverage company and operates in more than 180 countries with
a portfolio of over 2,000 brands spanning coffee, pet care, nutrition, confectionery and health science.
Founded over 150 years ago, the group has continually adapted its product offering, with recent investment
focused on higher-growth areas such as plant-based foods, infant nutrition and pet care. Following a
challenging 2025, Nestlé is undergoing a transformation under new CEO Philipp Navratil, with an increased
emphasis on operational efficiency, innovation and a more performance-driven culture. The investment
case is supported by a clear strategic roadmap, scope for cost savings and margin recovery, and renewed
growth initiatives, alongside the company’s scale, brand strength and strong dividend record.
Industry Food Producers
Roche (Switzerland)
% of Net Assets
5.8%
Roche is a compelling long-term investment, supported by its strong financial profile, leading market
products and substantial growth potential. As one of the world’s largest biotechnology companies, it is
focused on improving standards of care across areas such as oncology, immunology, infectious diseases,
ophthalmology and neuroscience. Roche’s diversified product portfolio, deep and innovative pipeline,
disciplined risk management and strong shareholder returns means the company is well positioned to
deliver sustained growth and value creation through to the end of the decade and beyond, with limited
downside from patent expiries and meaningful upside from pipeline innovation. Roche now has one of the
longest duration growth profiles in Pharma after recent drug trial successes in the areas of breast cancer
and multiple sclerosis.
Industry Pharmaceuticals and
Biotechnology
Industry Software and Computer
Services
TotalEnergies (France)
% of Net Assets
4.0%
TotalEnergies is a leading integrated energy company with operations across the full energy value chain,
producing and marketing oil, natural gas and electricity across more than 120 countries and employing
over 100,000 people globally. Founded in the aftermath of the First World War, the group has evolved into
a differentiated multi-energy major, combining robust cash generation from its hydrocarbon businesses
with disciplined investment in renewables and electricity, including solar, wind, biomass and hydrogen.
TotalEnergies has a balanced strategy, strong financial performance and disciplined capital allocation, which
support an attractive shareholder return profile. Its clear decarbonisation targets and growing exposure to
higher-growth energy solutions position the company well to deliver both near-term resilience and long-term
value creation through the global energy transition.
Industry Oil, Gas and Coal
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L’Oréal (France)
% of Net Assets
3.6%
L’Oréal is the world’s leading beauty company, with a diversified portfolio of more than 30 global brands
spanning haircare, skincare, make-up and fragrances, and a presence in over 120 countries. The company
has powerful structural growth drivers including favourable demographic trends, particularly the expansion
of the middle class in emerging markets, as well as premiumisation and the increasing importance of
innovation in a digital, review-driven consumer landscape. L’Oréal’s scale, strong financial position and
sustained investment in research and development, digital capabilities and Beauty Tech support resilient
growth and cash generation, while its commitment to sustainability and operational excellence positions
the company as a long-term structural winner in the global beauty industry.
Industry Personal Goods
Assa Abloy (Sweden)
% of Net Assets
3.2%
Assa Abloy is the global leader in access solutions, with strong market positions across Europe, North
America and Latin America, and expanding exposure to Asia and other emerging markets. The group
has a clear strategic focus on innovation, digitalisation and the transition towards electromechanical and
connected access solutions. It is also growing its service and data centre businesses, which support higher
levels of recurring revenue. Its resilient operating performance, consistent margins and strong balance
sheet position it well to deliver sustained growth and long-term value creation.
Industry Construction and Materials
Intesa Sanpaolo (Italy)
% of Net Assets
3.3%
Intesa Sanpaolo is Italy’s largest banking group and a leading player in the European financial sector.
The bank has a robust, diversified business model, strong financial performance, and a resilient market
position, built on disciplined capital management and attractive shareholder returns. It stands out among
peers as a highly profitable, well-capitalised, and operationally efficient European bank. Its diversified
business model, strong capital returns, and prudent risk management give it a long-term investment
appeal. While growth may moderate as interest rates normalise and the Italian market matures, the banks
stable earnings, high dividend yield, and resilience to stress make it a compelling choice for income-
focused and defensive-minded investors.
Industry Banks
Legrand (France)
% of Net Assets
3.0%
Legrand is a global leader in electrical and digital building infrastructure, operating in more than 170
countries with a well-balanced geographic footprint across Europe, North America and the rest of the
world. Its extensive product range spans wiring devices, cable management, energy efficiency solutions,
connected products and specialised offerings for data centres and electric vehicle (EV) charging
infrastructure. Legrand’s strong fundamentals, leadership in structurally attractive growth areas such as data
centres, and proven execution and disciplined capital allocation make it an attractive long-term investment
case. There is further potential upside from ongoing digitalisation, electrification and sustainability trends,
as well as recovery in more cyclical end markets.
Industry Electronic and
Electrical Equipment
Cie Financière Richemont (Switzerland)
% of Net Assets
3.6%
Cie Financière Richemont is a global leader in luxury goods, with a portfolio of iconic brands including
Cartier, Van Cleef & Arpels, Buccellati, Piaget and Montblanc, and a particular strength in high-end
jewellery and specialist watchmaking. The group operates across jewellery, watches and selected fashion
and accessories, with a strong emphasis on craftsmanship, brand investment and omnichannel retailing.
It’s dominant position in luxury jewellery, high-margin business mix, robust financial profile and balanced
global exposure support a compelling long-term investment case, with ongoing investment in brand equity
and operational excellence supporting continued value creation.
Industry Personal Goods
Spotlight on the Top 10 Holdings continued
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
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
ASML
Technology Hardware and Equipment 154,933 7.0 154,933
Roche
Pharmaceuticals and Biotechnology 129,647 5.8 129,647
Nestlé
Food Producers 94,474 4.3 94,474
SAP (shares and long CFD)
Software and Computer Services 93,462 4.1 28,850
TotalEnergies
Oil, Gas and Coal 89,317 4.0 89,317
Cie Financière Richemont
Personal Goods 79,953 3.6 79,953
L'Oréal
Personal Goods 79,561 3.6 79,561
Intesa Sanpaolo
Banks 73,090 3.3 73,090
Assa Abloy
Construction and Materials 71,452 3.2 71,452
Legrand (shares and long CFD)
Electronic and Electrical Equipment 67,960 3.0 24,908
Ten largest long exposures 933,849 41.9 826,185
Other long exposures
KBC Group 66,677 3.0 66,677
Novo Nordisk 66,619 3.0 66,619
AXA 65,688 3.0 65,688
Kone 63,377 2.9 63,377
Sampo 63,376 2.9 63,376
Bankinter 62,378 2.8 62,378
Deutsche Börse Group 60,287 2.7 60,287
Schneider Electric 58,775 2.6 58,775
Partners Group Holding 54,721 2.5 54,721
ABN AMRO Bank 53,967 2.4 53,967
Amadeus IT Group 52,943 2.4 52,943
Hermès International 50,716 2.3 50,716
Linde (long CFD) 50,301 2.2 1,423
EssilorLuxottica 49,620 2.2 49,620
Portfolio Listing
as at 31 December 2025
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Asset Exposure Fair Value
£’000 %
1
£’000
3i Group 49,228 2.2 49,228
Epiroc 45,963 2.1 45,963
Lonza Group 45,543 2.1 45,543
MTU Aero Engines 44,295 2.0 44,295
Intertek Group 42,224 1.9 42,224
Ryanair Holdings (long CFD) 41,838 1.9 99
Veolia Environnement 41,176 1.9 41,176
Industria de Diseno Textil 41,128 1.8 41,128
Symrise 38,930 1.8 38,930
DNB Bank 37,683 1.7 37,683
Sika 35,140 1.6 35,140
Nordea Bank 34,811 1.5 34,811
Dassault Systèmes 31,758 1.4 31,758
Société des Bains de Mer de Monaco 30,828 1.4 30,828
DKSH Holding 25,923 1.2 25,923
DSM-Firmenich 22,227 1.0 22,227
SIG Group 18,081 0.8 18,081
Edenred 9,370 0.5 9,370
Total long exposures before long futures 2,389,440 107.6 2,191,159
Long Futures
EURO STOXX 50 Future March 2026 47,039 2.1 405
Gross Asset Exposure
2
2,436,479 109.7
Portfolio Fair Value
3
2,191,564
Net current assets (excluding derivative liabilities) 29,666
Shareholders’ Funds (per Balance Sheet) 2,221,230
1 Asset Exposure is expressed as a percentage of Shareholders’ Funds.
2 Gross Asset Exposure comprises market exposure to investments of £2,189,231,000 (per Note 10: Investments on page 69) plus market exposure to derivative instruments
of £247,248,000 (per Note 11: Derivative instruments on page 70).
3 Portfolio Fair Value comprises investments of £2,189,231,000 plus derivative assets of £2,333,000 (per the Balance Sheet on page 61).
Portfolio Listing continued
Job No: 104158 Proof Event: 13 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Annual Report 2025
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
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.
Switzerland
France
Germany
Netherlands
Finland
Spain
Sweden
Italy
UK
Denmark
Other
Future
Total 2025
1
Index 2025
2
Total 2024
1
Financials
Banks – – – 2.4 1.5 2.8 – 3.3 – – 4.7 – 14.7 14.2 9.0
Investment Banking and Brokerage
Services 2.5 – 2.7 – – – – – 2.2 – – – 7.4 4.0 10.6
Non-Life Insurance – 3.0 – – 2.9 – – – – – – – 5.9 6.2 4.3
Life Insurance – – – – – – – – – – – – – 0.7 –
2.5 3.0 2.7 2.4 4.4 2.8 – 3.3 2.2 – 4.7 – 28.0 25.1 23.9
Industrials
Electronic and Electrical Equipment – 3.0 – – – – – – – – 2.6 – 5.6 3.6 2.9
Industrial Engineering – – – – 2.9 – 2.1 – – – – – 5.0 2.2 3.8
Construction and Materials 1.6 – – – – – 3.2 – – – – – 4.8 4.5 4.5
Industrial Support Services 1.2 0.5 – – – – – – 1.9 – – – 3.6 1.2 3.8
Aerospace and Defense – – 2.0 – – – – – – – – – 2.0 4.2 1.9
General Industrials 0.8 – – – – – – – – – – – 0.8 2.2 1.3
Industrial Transportation – – – – – – – – – – – – – 2.4 –
3.6 3.5 2.0 – 2.9 – 5.3 – 1.9 – 2.6 – 21.8 20.3 18.2
Technology
Software and Computer Services – 1.4 4.1 – – 2.4 – – – – – – 7.9 4.3 9.8
Technology Hardware and
Equipment – – – 7.0 – – – – – – – – 7.0 5.1 5.8
– 1.4 4.1 7.0 – 2.4 – – – – – – 14.9 9.4 15.6
Consumer Discretionary
Personal Goods 3.6 5.9 – – – – – – – – – – 9.5 5.4 11.9
Automobiles and Parts – – – – – – – – – – – – – 2.2 –
Travel and Leisure – – – – – – – 1.8 – – 1.4 – 3.2 0.5 3.7
Retailers – – – – – 1.9 – – – – – – 1.9 0.9 –
Media – – – – – – – – – – – – – 0.5 –
Consumer Services – – – – – – – – – – – – – 0.2 –
Household Goods and Home
Construction – – – – – – – – – – – – – 0.1 –
3.6 5.9 – – – 1.9 – 1.8 – –
1.4 – 14.6 9.8 15.6
Health Care
Pharmaceuticals and Biotechnology 7.9 – – – – – – – – 3.0 – – 10.9 10.8 14.3
Medical Equipment and Services – 2.2 – – – – – – – – – – 2.2 2.3 4.5
Health Care Providers – – – – – – – – – – – – – 0.3 –
7.9 2.2 – – – – – – – 3.0 – – 13.1 13.4 18.8
Distribution of the Portfolio
as at 31 December 2025
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Switzerland
France
Germany
Netherlands
Finland
Spain
Sweden
Italy
UK
Denmark
Other
Future
Total 2025
1
Index 2025
2
Total 2024
1
Consumer Staples
Food Producers 5.3 – – – – – – – – – – – 5.3 3.8 5.9
Beverages – – – – – – – – – – – – – 1.2 –
Personal Care, Drug and Grocery
Stores – – – – – – – – – – – – – 1.0 –
5.3 – – – – – – – – – – – 5.3 6.0 5.9
Energy
Oil, Gas and Coal – 4.0 – – – – – – – – – – 4.0 2.6 4.0
Alternative Energy – – – – – – – – – – – – – 1.2 –
– 4.0 – – – – – – – – – – 4.0 3.8 4.0
Basic Materials
Chemicals – – 1.8 – – – – – – – 2.2 – 4.0 2.4 4.3
Industrial Metals and Mining – – – – – – – – – – – – – 0.7 –
Industrial Materials – – – – – – – – – – – – – 0.4 –
– – 1.8 – – – – – – – 2.2 – 4.0 3.5 4.3
Utilities
Gas, Water and Multi-Utilities – 1.9 – – – – – – – – – – 1.9 3.1 1.5
Electricity – – – – – – – – – – – – – 1.5 –
– 1.9 – – – – – – – – – – 1.9 4.6 1.5
Telecommunications
Telecommunications Service
Providers – – – – – – – – – – – – – 2.5 1.5
Telecommunications Equipment – – – – – – – – – – – – – 0.6 –
– – – – – – – – – – – – – 3.1 1.5
Real Estate
Real Estate Investment and Services – – – – – – – – – – – – – 0.6 1.5
Real Estate Investment Trusts – – – – – – – – – – – – – 0.4 –
– – – – – – – – – – – – – 1.0 1.5
Future – – – – – – – – – – – 2.1 2.1 – 3.5
Asset Exposure – 2025
1
22.9 21.9 10.6 9.4 7.3 7.1 5.3 5.1 4.1 3.0 10.9 2.1 109.7
Index – 2025
2
100.0
Asset Exposure – 2024
1
20.1 31.5 13.6 7.1 4.4 4.1 5.9 2.4 4.6 5.5 8.6 3.5 111.3
1 Asset Exposure is expressed as a percentage of Shareholders’ Funds.
2 FTSE World Europe ex UK Index (Benchmark Index).
Distribution of the Portfolio continued
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Annual Report 2025
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Analysis of change in NAV total return for the year ended 31 December 2025 %
Impact of:
Index +20.8
Exchange Rate +7.1
Gearing (CFDs and Loan Notes) +1.8
Stock Selection -13.2
Expenses -0.9
Share Repurchases +0.1
Cash +0.5
NAV total return for the year ended 31 December 2025 +16.2
Ten Highest Contributors to NAV total return %
Bankinter +1.3
ABN AMRO Bank +1.2
KBC Group +0.7
Intesa Sanpaolo +0.7
ASML +0.6
Ryanair Holdings +0.4
Sampo +0.4
Industria de Diseno Textil +0.3
Schneider Electric +0.3
Roche +0.3
Ten Highest Detractors to NAV total return %
Novo Nordisk -1.7
Symrise -1.3
Partners Group Holding -1.1
SAP -1.0
Dassault Systèmes -1.0
3i Group -1.0
Banco Santander -1.0
Sika -0.8
Banco Bilbao Viz Argentaria -0.7
SIG Group -0.7
Source: Fidelity.
Attribution Analysis
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Annual Report 2025
For the year ended 31December 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Assets
Gross Asset Exposure (£m)
1
2,436.5 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
Shareholders’ Funds (£m) 2,221.2 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
NAV per Ordinary Share (p)
2
434.39 382.44 388.39 337.87 358.68 296.57 277.19 231.77 248.08 210.75
Ordinary Share Price and Discount
Ordinary Share Price (p) 416.50 352.00 360.00 319.50 340.50 286.00 260.00 207.00 226.70 183.50
Discount to NAV (%)
2
4.1 8.0 7.3 5.4 5.1 3.6 6.2 10.7 8.6 12.9
Revenue and Costs
Revenue Return per Ordinary Share (p)
2
11.30 10.41 9.32 9.00 7.50 5.12 7.00 6.94 4.37 4.34
Dividends per Ordinary Share (p) 9.90 9.10 8.25 7.70 6.83 6.50 6.47 6.28
3
4.35 4.17
Ongoing Charges Ratio (Cost of running
the Company)
2
0.73
4
0.76 0.77 0.78 0.79 0.86 0.87 0.88 0.93 0.99
Gearing
Gross Gearing (%)
2, 5
9.7 11.3 13.1 11.7 11.1 11.8 7.1 10.1 13.2 3.0
Net Gearing (%)
2, 6
9.7 11.3 11.5 11.7 11.1 9.4 4.7 6.1 3.6 3.0
Performance Total Returns
NAV per Ordinary Share (%)
2
+16.2 +0.5 +17.5 -3.6 +23.5 +9.7 +23.8 -4.8 +20.0 +17.6
Ordinary Share Price (%)
2
+21.1 -0.1 +15.3 -3.8 +21.7 +13.1 +30.6 -6.8 +26.2 +7.6
Benchmark Index (%) +27.9 +3.0 +15.7 -7.0 +17.4 +8.6 +20.4 -9.5 +17.5 +19.7
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 The Ongoing Charges Ratio including the fee waiver by Fidelity as part of the combination of assets with Henderson European Trust plc was 0.59%.
5 Gross Asset Exposure in excess of Shareholders’ Funds.
6 Net Market Exposure in excess of Shareholders’ Funds.
Sources: Fidelity and Datastream.
Past performance is not a guide to future returns.
Ten Year Record
Job No: 104158 Proof Event: 13 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Total return performance for ten years to 31 December 2025
+197.9%
+205.8%
+177.4%
Prices rebased to 100.
Sources: Fidelity and Datastream.
Ordinary share price
FTSE World Europe ex UK Index
NAV per ordinary share
80
100
120
140
160
180
200
220
240
260
280
300
320
340
Dec 23 Dec 24 Dec 25Dec 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 2025
434.39p
416.50p
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 24 Dec 25Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 21Dec 20
Dec 22
Job No: 104158 Proof Event: 13 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Total return performance relative to the Benchmark Index for ten years to 31 December 2025
+10.2%
+7.4%
Prices rebased to 100.
Sources: Fidelity and Datastream.
80
85
90
95
100
105
110
115
120
125
130
135
Dec 23 Dec 24 Dec 25Dec 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 2025 (%)
Sources: Fidelity.
-14
-12
-10
-8
-6
-4
-2
0
2025202420232022202120202019201820172016
-5.4
-4.1
-8.0
-12.9
- 8.6
-10.7
- 6.2
- 3.6
-5.1
-7.3
Summary of Performance Charts continued
Job No: 104158 Proof Event: 13 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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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 12 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.
Investment Objective
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.
Strategy
In order to achieve the Company’s investment 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 investment objective, strategy and principal
activity have remained unchanged throughout the year ended
31 December 2025.
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 and proven business models;
• Cash generation – often a good indication of future dividend
growth;
• Strong balance sheets – ensures 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 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 and principally in the following ways:
• As an alternative form of gearing to bank loans. The Company
can enter into long CFDs to 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
overvalued.
• 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 the Company’s use of derivative instruments.
These limits and their impacts are monitored by the Investment
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 x the notional
contract size x 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.
The effect of gearing is to magnify the consequence of market
movements on the portfolio. If the portfolio value rises, the NAV
will be positively impacted, but if it falls, the NAV will be adversely
impacted.
The Company gears through the use of derivative instruments,
primarily through the use of low-cost CFDs and index futures, to
seek to enhance investment returns by increasing exposure to
securities selected by the Investment Manager. The Company can
also obtain gearing through the use of borrowings, and following
the combination with Henderson European Trust plc (“HET”), the
Company acquired two HET Loan Notes: Unsecured Series A
Senior Notes of €25,000,000 at 1.53% due on 31 January 2047;
and Unsecured Series B Senior Notes €10,000,000 at 1.66% due on
31 January 2052.
The Board monitors the level of gearing and the use of derivative
instruments carefully and has defined a risk control framework for
this purpose against which the Company’s gearing is reviewed at
each Board meeting. The Board is responsible for the magnitude
of the Company’s gearing whilst the Investment Manager decides
gearing on a day-to-day basis within a range set by the Board.
As noted above, 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.
Modification of the Investment Objection and/or the
Investment Policy
In accordance with the UK Listing Rules, any material change to the
Company’s published Investment Objective or Investment Policy will
require the prior approval of both the Financial Conduct Authority
and the shareholders of the Company (by way of an ordinary
resolution).
Strategic Report continued
Job No: 104158 Proof Event: 13 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
Customer: Fidelity Project Title: FET Annual Report 2025 T: 0207 055 6500 F: 020 7055 6600
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Annual Report 2025
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Fidelity European Trust PLC
STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
Performance
The Company’s performance for the year ended 31 December
2025 and 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 12. The Portfolio Listing,
the Distribution of the Portfolio, the Attribution Analysis, the Ten Year
Record and the Summary of Performance Charts are set out on
pages 15 to 22.
Dividend Policy
The Company seeks to deliver a progressive dividend in normal
circumstances and pays dividends twice per annum 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 positive years, thereby building
up revenue reserves that can be used to supplement dividends
during challenging times. In addition, the Company conducts
its business so as to satisfy the conditions to retain approval as
an investment trust under section 1158 of the Corporation Tax
Act. In accordance with regulation 19 of the Investment Trust Tax
Regulations, the Company does not (except to the extent permitted
by those regulations) retain more than 15 per cent of its income
(as calculated for UK tax purposes) in respect of an accounting
period and seeks to ensure that it distributes at least the minimum
amount required to maintain investment trust status. The Board may
resolve to pay dividends on the Shares from time to time in order
to comply with these requirements.
In general, the Company pays one interim dividend and one final
dividend in respect of each financial year (usually paid in May and
October, respectively, each year).
Results and Dividends
The Company’s results for the year ended 31 December 2025 are
set out in the Income Statement on page 59. The revenue return
was 11.30 pence and the capital gain was 51.50 pence, giving a
total return of 62.80 pence per ordinary share.
In order to continue to qualify as an investment company, the
Company is required by Section 1159 of the Corporation Tax Act
2010 to distribute sufficient net income so that it retains no more
than 15% of its net income in any reporting year.
The Board recommends a final dividend of 6.00 pence per
ordinary share for the year ended 31 December 2025 to be paid
on 19 May 2026 to shareholders who appear on the share register
as at the close of business on 27 March 2026 (ex-dividend date
26 March 2026). Together with the interim dividend of 3.90 pence
per ordinary share paid on 23 October 2025, the total dividends
for the year are 9.90 pence per ordinary share.
Key Performance Indicators
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
2025
%
Year ended
31 December
2024
%
NAV per Ordinary Share total
return
1
+16.2 +0.5
Ordinary Share Price total return
1
+21.1 -0.1
FTSE World Europe ex UK Index
total return (Benchmark Index) +27.9 +3.0
Discount to NAV
1
4.1 8.0
Ongoing Charges Ratio
1,2
0.73 0.76
1 Alternative Performance Measures.
2 The Ongoing Charges Ratio including the fee waiver as part of the combination
with Henderson European Trust plc was 0.59%.
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 19 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 20 to 22 show this information. The
costs of running the Company are regularly considered to ensure
that they are reasonable and competitive.
RISK FRAMEWORK
Principal Risks and Uncertainties and Risk Management
As required by provisions 28 and 29 of the 2024 UK Corporate
Governance Code (“UK 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 will implement the new requirement under
provision 29 of the 2024 UK Code for reporting periods from
1 January 2026, of a Board declaration on the effectiveness of
material risk management and internal controls in the Company’s
next reporting year.
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 emerging risks that may
arise from existing risks or new situations 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.
Globally, climate change (large scale shift in the planet’s weather
patterns and average temperatures) effects are already being
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experienced in the form of changing weather patterns. Extreme
weather events can potentially impact the operations of investee
and potential investee companies, their supply chains and their
customers. Climate change continues to be a key principal as well
as an emerging risk. The Board notes that the Manager includes
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 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,
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. There are currently a number
of geopolitical factors that could mean greater stock market
risks and heightened macro-economic changes such as inflation,
interest rates, currency fluctuations, energy costs and an increased
regulatory environment.
Emerging Risks – Manager’s Role
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.
Annual Review of the Risk Register
The Company has a full risk register which includes less material
risks which the Board reviews at least annually.
The Board considers the risks listed below and on pages 27 to 29
as the principal risks and uncertainties faced by the Company.
Strategic Report continued
1. Economic, Geopolitical and Market Risks
Trend: Increased
Description and Impact Mitigation
• The Company and its assets may be impacted by geopolitical,
economic and market related risks associated with pursuing an
investment policy focused on continental Europe. In particular,
the most recent escalation in the Middle East has injected
fresh volatility into oil markets, to which Europe is exposed
given its dependence on imported energy and the inflationary
implications. In addition to the oil prices, natural gas and
a variety of soft commodities and supply limitations have
fuelled global inflation and economic instability, specifically
within Western nations. The war in Ukraine and the potential
for Russian aggression (hybrid and kinetic) against European
NATO members remains in focus. Global trade and tariff wars
continue, with ongoing tensions between the US and EU and
China and the EU. Finally, local European sovereigns can be
subject to sudden political upheaval. The geopolitical risk and
economic instability, including the macroeconomic uncertainty
continues to impact Western investment appetite.
• Heightened tensions between the U.S. and global trading
partners, particularly China, continue to impact markets. The
US/China relationship is also impacted by the dynamic of the
balance between national security and economic interests
and could lead to higher volatility, sanctions for broader
markets, technology and oil in particular, as well as risk of
changes in foreign policies across the globe.
• China’s outlook for ‘controlled stabilisation’ remains intact,
supported by targeted policy measures. China’s growth
stabilisation is more credible post-deal (i.e. the government’s
commitment to implementing strategic economic measures
to achieve steady growth and economic resilience), and the
agreement with the U.S. reduces pressure on China to deliver
new fiscal easing. Exports and industrial activities continue
to outperform despite the slower than expected recovery in
domestic demand.
• 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 market,
economic and political background is core to the Company’s
continued success. Their 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 market, economic and political 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.
• The Board regularly reviews the impact of gearing and
derivatives and has comfort that the portfolio is sufficiently
diversified by sector and number of holdings.
• Risks to which the Company is exposed to in the market
and currency risk category are included in Note 18 to
the Financial Statements on pages 74 to 81 together with
summaries of the policies for managing these risks. It is the
Company’s policy not to hedge the underlying currencies of
the holdings in the portfolio but rather to take the currency
risk into consideration when making investment decisions.
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
2. Investment Performance Risk (including Gearing Risk)
Trend: Increased
Description and Impact Mitigation
• The risk of underperformance for a sustained period against
the Benchmark Index or peer group. 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 and there is a
risk of volatility of performance in the short-term. Continued
underperformance could lead to the Company and its
objective becoming unattractive to investors.
• Derivative instruments are used to enhance investment
returns. The principal risk is that the Portfolio Managers fails
to use gearing effectively, resulting in a failure to outperform
in a rising market or to underperform in a falling market. The
Company gears using derivatives and bank loans.
• The Portfolio Managers are responsible for actively
monitoring the portfolio selected in accordance with the asset
allocation parameters and seeks to ensure that individual
stocks meet an acceptable risk/reward profile.
• The Board reviews Fidelity’s compliance with agreed
investment restrictions; investment performance and risk;
relative performance; the portfolio’s risk profile; and whether
appropriate strategies are employed to mitigate any negative
impact of substantial changes in the markets. The Board also
regularly canvasses major shareholders for their views with
respect to company matters.
• The Board has put in place policies and limits to control
the Company’s use of derivatives and exposures. These are
monitored daily by the Manager’s Compliance team and
regular reports are provided to the Board. Further detail
on derivative instruments risk is included in Note 18 to the
Financial Statements on pages 74 to 81.
• The Board regularly considers the level of gearing and
gearing risk. The Investment Policy sets the gearing limits
within which the Manager must operate.
3. Cybercrime and Information Security Risks
Trend: Increased
Description and Impact Mitigation
• There is cybersecurity risk from cyberattacks or threats to
the functioning of global markets and to the Manager’s own
business model, including its and the Company’s outsourced
suppliers. The external threat level has shifted with a number
of UK companies successfully targeted in recent months,
and Artificial Intelligence (AI) has also increased the attack
potential from nefarious actors.
• There is risk of cybercrime such as phishing, remote access
threats, extortion, and denial-of-service attacks from highly
organised criminal networks and sophisticated ransomware
operators, including threats such as service disruption/
extortion attacks (DDoS, ransomware), financial theft and
data breaches, regulatory non-compliance, reputational
damage/loss of customer trust. The threat environment
continues to evolve rapidly, including the heightened
potential threat from nation state backed threat actors due
to geopolitical tensions. Ransomware continues to increase
globally and is also becoming a supply chain risk.
• The risk is monitored by the Board with the help of the
Manager’s global cybersecurity team and their extensive
Strategic Cyber and Information Security programme and
assurances from outsourced suppliers.
• The Manager has established a comprehensive framework
of information security policies and standards which provide
a structured approach to identify, prevent, and respond
to information security threats. The framework ensures
consistency in Fidelity’s security measures, enhances its ability
to adapt to evolving/emerging threats, and compliance with
changing regulatory requirements. The Company’s other
service providers also have similar measures in place.
• Key performance indicators and metrics have been
developed by the Manager to monitor the overall efficacy of
cybersecurity processes and controls and to further enhance
the Manager’s cybersecurity strategy and operational
resilience.
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4. Changes in Legislation, Taxation or Regulation
Trend: Stable
Description and Impact Mitigation
• Changes in legislation, taxation or regulation, or other
external influence that require changes to the investment
trust structure of the Company are a significant risk for the
Company.
• A breach of Section 1158 of the Corporation Tax Act 2010
could lead to a loss of investment trust status resulting in the
Company being subject to tax on capital gains.
• There have been increased concerns about investment
cost disclosures and their impact on the industry. There is
a risk that the FCA’s Consumer Composite Investment (CCI)
regime may make investment companies more complex for
consumers and other investors to understand and increase
the regulatory burden imposed on the sector if it proceeds
with some of the proposals as drafted.
• The Board and Manager closely monitor regulatory, taxation
and legislative changes, with developments impacting the
Company summarised in the form of regular reporting to the
Board.
• The Manager monitors Section 1158 status to ensure any
issues are escalated to the Board and addressed promptly.
• The Manager participates in industry discussions regarding
regulatory changes impacting investment companies,
and regulatory developments continue to be monitored
and managed by Fidelity through active lobbying and
negotiations as well as a robust change management
process.
5. Competition Risks and Marketplace Threats Impacting Business Growth
Trend: Stable
Description and Impact Mitigation
• There is increased activity around mergers and acquisitions
across the investment company marketplace and alternative
investment offerings (including passive vehicles) which could
influence the demand for the Company’s shares. In addition,
cheaper capital and the search for technology scale is also
likely to mean increased consolidation.
• There is a risk of costly shareholder activism in the investment
company sector, pursuing goals that may not be in the
interests of most shareholders.
• The Board, the Company’s Broker and the Manager closely
monitor industry activity, the peer group and the share
register.
• An annual review of strategy is undertaken by the Board
to ensure that the Company continues to offer a relevant
product to investors.
6. Business Continuity and Crisis Management
Trend: Stable
Description and Impact Mitigation
• There is business process disruption risk from continued
threats of cyberattacks, geopolitical events, outages, fire
events and natural disasters, resulting in financial and/or
reputational impact to the Company affecting the functioning
of the business.
• The Company relies on a number of third-party service
providers, principally the Registrar, Custodian and Depositary
who may be subject to cybercrime.
• Fidelity has Business Continuity and Crisis Management
Frameworks in place to deal with business disruption and
assure operational resilience.
• All third-party service providers are subject to a risk-based
programme of risk oversight and internal audits by the
Manager and their own internal controls reports are received
an annual basis and any concerns are investigated.
• The Board regularly reviews the services provided by third
parties.
Strategic Report continued
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
7. Operational Risks
Trend: Stable
Description and Impact Mitigation
• There is risk of financial losses or reputational damage from
inadequate or failed internal processes, people and systems
or from external parties and events.
• Fidelity’s Operational Risk Management Framework is
designed to pro-actively prevent, identify and manage
operational risks inherent in most activities.
• Fidelity uses robust systems and procedures dedicated to
its operational processes. Its risk management structure is
designed according to the FCA’s three lines of defence model.
8. Discount Control Risk
Trend: Stable
Description and Impact Mitigation
• The price of the Company’s shares and its discount to NAV
are factors which are not completely within the Company’s
control.
• The Board has a discount management policy which was
updated in the reporting year in order to maintain the discount
to NAV in mid-single digits in normal market conditions. Some
short-term influence over the discount may be exercised by
carrying out share repurchases at acceptable prices and within
the parameters set by the Board.
• In considering the risk that the discount to NAV poses to
shareholder value and returns, both the absolute level of
the discount and the amount relative to the Company’s peer
group and the wider market are considered.
• The Board reviews the investment strategy, investment
performance and the marketing approach, given the
influence of all these factors on the discount.
• 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 on a regular basis.
The demand for shares can be influenced through good
performance and an active investor relations programme.
• The Board regularly reviews the Company’s share register,
and the Chairman meets with large shareholders.
• Discretionary repurchases of ordinary shares are made within
guidelines set by the Board.
9. Key Person Risk and Operational Support Risks
Trend: Stable
Description and Impact Mitigation
• The loss of the Portfolio Managers or other key individuals
could lead to potential performance and/or operational
issues.
• The Portfolio Managers have a differentiated style in
relation to their peers. This style is intrinsically linked with the
Company’s investment philosophy and strategy, and therefore,
the Company has a key person dependency on them.
• There is also a risk that the Manager has inadequate
succession plans for other key operational individuals.
• The Company’s Portfolio Managers work closely together
and have extensive experience in the same markets and
companies and share a common investment approach and
complementary investment experience and therefore if there
was a loss of one of them, the remaining Portfolio Manager
can provide continuity in managing the portfolio. The Portfolio
Managers are also supported by an Investment Specialist
and a team of Fidelity analysts.
• The Manager identifies key dependencies which are then
addressed through succession plans, particularly for portfolio
managers.
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Continuation Vote
A continuation vote takes place every two years. The last
continuation vote was at the AGM held on 8 May 2025, and
93.85% of shareholders voted in favour of the continuation of the
Company. The next continuation vote will take place at the AGM
in 2027.
Viability Statement
In accordance with provision 31 of the 2024 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 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.
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 25 to 29;
• 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 2025 was a NAV total return of 63.3% and
an ordinary share price total return of 63.5% compared to the
Benchmark Index total return of 66.5%.
The Board regularly reviews the investment policy to consider
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 additional 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 26. The Board has also considered the impact of
regulatory changes, unforeseen market events, geopolitical
concerns and the ongoing global implications of the war in
Ukraine, and more recently the war 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 35.
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, accounting 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
and bank loans, the level of gearing and others. These limits and
guidelines are regularly monitored and reviewed and are set out
on pages 23 and 24.
Strategic Report continued
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STRATEGYFINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS
The Board receives regular reports from the Company’s Broker
which covers market activity, how the Company compares with
peers in the AIC Europe and European Smaller Companies
sectors on performance, discount and share repurchase activity,
an analysis of the Company’s share register and market trends.
The Board places great importance on communication with
shareholders. The Annual General Meeting (“AGM”) 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 Company 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.
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 and considers the Manager’s Environmental, Social
and Governance (ESG) approach.
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, appointing Davina
Walter as Chairman of the Board to replace Vivian
Bazalgette as Chairman of the Board when he stepped
down at the conclusion of the AGM on 8 May 2025;
• Holding multiple ad hoc Board meetings between March
and September 2025 in the lead up to combining assets with
Henderson European Trust plc (“HET”);
• The decision to combine assets with those of HET on 29
September 2025 (see further details in the Chairman’s
Statement on page 3 and also in the Notes to the Financial
Statements on page 62). As part of the combination,
appointing Vicky Hastings and Rutger Koopmans to the
Company’s Board.
• Following the combination of assets with HET, agreeing a
lower management fee with the Manager with effect from
29 September 2025. This is made up of: 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 and up to £1.4 billion; and
0.55 per cent of net assets in excess of £1.4 billion.
• The decision to pay an interim dividend of 3.90 pence
per ordinary share and a final dividend of 6.00 pence per
ordinary share (a total of 9.90 pence per ordinary share), to
maintain the Board’s policy to pay progressive dividends in
normal circumstances. Subject to shareholder approval, the
Company will have paid an increased dividend for 15 years
in a row;
• Authorising the repurchase of 9,286,723 shares into Treasury
in the reporting year as part of the Board’s discount
management policy. Since the year ended 31 December
2025 and up to the latest practicable date of this report,
a further 2,219,500 shares have been repurchased into
Treasury;
• Meetings with some of the Company’s key shareholders
during the reporting year; and
• The decision once again to hold a hybrid AGM in 2026
in order to make the AGM more accessible to those
shareholders who are unable to or prefer not to attend in
person.
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.
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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 to be 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 2025 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 2025
Number
of Board
Members
Percentage of
the Board
Number of Senior
Board Positions
(Chair, Senior
Independent
Director and
Chair of the Audit
Committee)
Men 3 43% 1
Women 4 57% 2
Ethnic Background Reporting as at 31 December 2025
Number
of Board
Members
Percentage of
the Board
Number of Senior
Board Positions
(Chair, Senior
Independent
Director and
Chair of the Audit
Committee)
White British
or other White
(including minority
white groups) 6 86% 3
Asian British 1 14% 0
CORPORATE AND SOCIAL RESPONSIBILITY
Environmental, Social and Governance (“ESG”) in the
Investment Process
The Board has contracted with Fidelity 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 the Manager 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 Investing at 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.
Modern Slavery Act 2015
As an externally managed investment company, the Company
has no employees and does not provide goods or services in
the normal course of business and does not have customers.
All its operational functions are outsourced to third-party service
providers. Accordingly, the Company falls outside the scope
of the Modern Slavery Act 2015. The Company’s suppliers are
predominantly professional advisers and the Company’s service
providers are considered to be low risk in this regard. In carrying
out its activities and in relationships with suppliers, the Company
aims to conduct itself responsibly, ethically and fairly.
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 corporate governance 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)
Product reports of Task Force on Climate-related Financial
Disclosures (TCFD) issued by the Manager 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 12. Details of emerging risks are
on pages 25 and 26.
By Order of the Board
FIL Investments International
Secretary
17 March 2026
Strategic Report continued
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Fidelity European Trust PLC
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
Davina Walter
Chairman (since 8 May 2025)
Appointed 1 November 2024
M
Davina Walter is Chairman of abrdn Diversified
Income and Growth plc. She was previously Chairman
of JPMorgan US Smaller Companies Trust plc,
Chairman of CT Property Trust plc, a non-executive
Director of Miton UK Microcap 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.
Victoria (Vicky) Hastings
Director
Appointed 29 September
2025
A
M
Vicky Hastings was previously non-executive Director
and Chair of Henderson European Trust plc and prior
to that of Henderson European Focus Trust plc. She
was also a non-executive Director of Alliance Witan plc,
Edinburgh Investment Trust plc, Impax Environmental
Markets plc, JPMorgan Asset Management UK Limited
and JPMorgan Asset Management International
Limited. She has over 35 years’ experience in the
investment management industry with leadership
positions at Merrill Lynch Private Investors and JO
Hambro Capital Management, a European equity fund
manager at Mercury Asset Management and Kleinwort
Benson Investment Management. She is also a Trustee
of Mountbatten Isle of Wight Ltd and Mountbatten
Hampshire Ltd.
Rutger Koopmans
Director
Appointed 29 September 2025
A
M
Rutger Koopmans is a non-executive Director of
Vollenhoven Groep and Chair of Stichting Pluryn and
Woningstichting Eigen Haard. He has an advisory
practice, PIT Self-Placement BV, offering career
counselling practice for senior executives. He was
previously a non-executive Director of Henderson
European Trust plc. He is also the author of “Your Life
Your Rules, taking charge of your working life”. He
started his career in 1982 at MeesPierson NV (formerly
Bank Mees & Hope NV), before moving to ING, where
he served as a Managing Director until 2008.
Fleur Meijs
Chair of the Audit Committee
(since 14 May 2018)
Appointed 1 September 2017
A
M
Fleur Meijs is a non-executive Director and Audit
Committee Chair of Ruffer LLP. 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 was
previously a non-executive Director of Invesco Asia Trust
plc. 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.
All Directors are non-executive Directors and all are independent.
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Annual Report 2025
Milyae Park
Director
Appointed 1 January 2022
A
M
Milyae Park is a non-executive Director and Marketing
Committee Chair of Alliance Witan PLC, a non-
executive Director and Sustainability Committee Chair
of THG PLC and a non-executive Director of Faber
and Faber Limited. 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.
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.
Board of Directors continued
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Annual Report 2025
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
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 2025.
The Company was incorporated in England and Wales as a
public limited company on 16 August 1991 under the registered
number 2638812 and commenced business 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 (2024: same).
The Board reviews the Management Agreement at least annually
and details are included in the Corporate Governance Statement
on page 41. The most recent review was carried out as part of
the combination with Henderson European Trust plc (“HET”).
Management Fee
From 1 April 2021 and up to 28 September 2025, the Company’s
management fee was 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. Since 29 September 2025
and following the combination of assets with HET, the Company’s
management fee remains on a tiered basis and was agreed
as follows: 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 and
up to £1.4 billion; and 0.55 per cent of net assets in excess of
£1.4 billion.
Fees for the reporting year were £9,671,000 (2024: £11,512,000)
and are disclosed in Note 4 on page 66. The fee for the
reporting year includes £2,537,000 waived by Fidelity as part of
the combination with HET.
The Board
All Directors served on the Board throughout the year ended
31 December 2025 with the exception of Vivian Bazalgette who
stepped down from the Board at the conclusion of the Annual
General Meeting (“AGM”) on 8 May 2025 and Vicky Hastings
and Rutger Koopmans joined the Board on 29 September
2025 (both following the completion of the combination of
assets with HET), thereby ensuring that shareholders of HET
(which was formerly Henderson European Focus Trust plc) were
represented on the Company’s Board. A brief description of all
serving Directors as at the date of this Annual Report is shown
on pages 33 and 34 and indicates their qualifications for Board
membership.
In line with the Board’s succession plan and tenure policy, Paul
Yates will not be seeking re-election at the AGM on 12 May 2026.
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, including the loan notes, 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 2027 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
significant geopolitical and market events and regulatory changes
that could impact 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 page 30.
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.
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Annual Report 2025
Auditors’ Appointment
As the current Auditor, Ernst & Young LLP, will have been in place
for 10 years in May 2026, an audit tender process was carried
out during the reporting year following which the Board proposed
that PricewaterhouseCoopers LLP (“PwC”) should be selected to
act as the Company’s auditor from and including the financial
year ending 31 December 2026. A resolution will be proposed to
appoint PwC as the Company’s auditor at the AGM on 12 May
2026.
Corporate Governance
The Corporate Governance Statement on pages 39 to 42 forms
part of this report.
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 66.
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 2025, the issued share capital of the Company
was 528,350,065 ordinary shares (2024: 416,447,910) of which
17,004,110 shares (2024: 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 511,345,955 (2024: 408,730,523). The
issued share capital of 528,350,065 shares includes 111,902,155
shares which were issued as a result of the Company’s transaction
with Henderson European Trust plc on 29September 2025.
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 actively
manages the Company’s level of premium/discount. If the
Company is trading at a discount, the Board will seek to maintain
it in mid-single digits in normal market conditions. The Board
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.
Share Issues
The Company issued 111,902,155 ordinary shares on
29September 2025 as a result of the Company’s combination
with Henderson European Trust plc. Other than this, no shares
were issued during the year to 31 December 2025 (2024: 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 12 May 2026 and resolutions to renew
these authorities will be put to shareholders at this AGM.
Share Repurchases
The Company repurchased 9,286,723 ordinary shares into
Treasury during the year to 31 December 2025 (2024: nil).
Since the year ended 31 December 2025 and as at the latest
practicable date of this report, the Company has repurchased a
further 2,219,500 shares into Treasury.
The authority to repurchase ordinary shares expires at the AGM
on 12 May 2026 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 2025 and 28 February 2026, 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
2025
%
28 February
2026
%
Fidelity Platform Investors 10.99 10.81
Evelyn Partners 7.45 7.48
Rathbones 7.03 7.07
Quilter Cheviot Investment
Management 6.80 6.69
Interactive Investor 6.74 6.79
Hargreaves Lansdown 6.48 6.45
City of London Investment
Management 3.66 3.67
Craigs Investment Partners 3.48 3.44
RBC Brewin Dolphin Ireland 3.15 3.18
An analysis of shareholders as at 31 December 2025 is detailed
in the table below.
Shareholders
% of voting
share capital
Private Investors
1
83.53
Mutual Funds 14.16
Insurance Funds 1.24
Pension Funds 0.64
Trading 0.43
Total 100.00
1 Includes Fidelity Platform Investors (10.99%).
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 23 to 32.
Directors’ Report continued
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Annual Report 2025
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
ANNUAL GENERAL MEETING – TUESDAY, 12 MAY 2026 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, accountant 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 Tuesday,
12 May 2026 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 86 to 89.
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 88 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
Note 9 to the Notes to the Notice of Meeting on page 88. 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://meetings.lumiconnect.com/100-968-191-255.
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://
meetings.lumiconnect.com/100-968-191-255 from your web
browser on a tablet or computer, 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 12 May 2026, resolutions will be proposed
relating to the items of business set out in the Notice of Meeting
on pages 86 and 87, including the items of special business
summarised below and on the next page.
Authority to Allot Shares
Resolution 13 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 £660,437. If passed, this
resolution will enable the Directors to allot a maximum of
26,417,480 ordinary shares which represents approximately 5%
of the issued ordinary share capital of the Company (including
Treasury shares) as at 17 March 2026, 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 14 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 £660,437 (including Treasury shares)
and represents approximately 5% of the issued ordinary share
capital of the Company as at 17 March 2026 and equivalent to
26,417,480 ordinary shares.
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Annual Report 2025
Authority to Repurchase Shares
Resolution 15 is a special resolution which renews the Company’s
authority to purchase up to 14.99% (76,318,040) of the ordinary
shares in issue (excluding Treasury shares) on 17 March 2026,
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.
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
17 March 2026
Directors’ Report continued
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Customer: Fidelity Project Title: FET Annual Report 2025 T: 0207 055 6500 F: 020 7055 6600
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Annual Report 2025
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
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 has followed the principles and provisions of the UK
Corporate Governance Code (the “UK Code”) issued by the
Financial Reporting Council (the “FRC”) in January 2024 and the
AIC’s Code of Corporate Governance (the “AIC Code”) issued by
the Association of Investment Companies (the “AIC”) in August
2024. 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 47, set out how the principles have
been applied. Provision 29 of the UK Code (provision 34 of
the AIC Code) in relation to internal controls will apply for the
Company’s year ending 31 December 2026.
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
As at the date of this Annual Report, the Board, chaired by
Davina Walter, consists of seven non-executive Directors.
The size of the Board in the past has been five Directors, however
following the combination with Henderson European Trust plc
(“HET”) (formerly Henderson European Focus Trust plc), the Board
felt that it was important to have representation on the Board for
HET shareholders. With that in mind, Vicky Hastings was asked
to join the Board on 29 September 2025, thereby providing
representation for the HET shareholders who transferred their
shares to the Company. She will also serve as a replacement for
Paul Yates when he steps down from the Board at the conclusion
of the AGM on 12 May 2026. Mrs Hastings also offers the skills
and investment management experience that would be lost when
Mr Yates retires.
HET also went through a combination of assets with Henderson
EuroTrust plc in 2024 and the Board asked Rutger Koopmans
to join the Board of the Company to provide continuity for the
Henderson EuroTrust shareholders who post combination with
HET transferred their shares to the Company. Mr Koopmans has
strong continental European perspective and also offers the
Board his considerable experience as a finance professional. The
Board is mindful of the tenure rules as Mr Koopmans joined the
Henderson EuroTrust board in 2016 and was due to retire at the
next HET AGM, however for the reasons explained, he will stay
on the Board until May 2027.
The size of the Board will be six non-executive Directors when
Mr Yates steps down from the Board at the conclusion of AGM on
12 May 2026. This will further reduce to five Directors when both
Fleur Meijs and Mr Koopmans retire from the Board in May 2027.
A recruitment process will be carried out later this year to replace
Ms Meijs as Chair of the Audit Committee.
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. He will be replaced as Senior
Independent Director by Milyae Park on 12 May 2026.
Biographical details of all serving Directors are on pages 33
and 34.
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
Corporate Governance Statement
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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 and one took place in November 2025. The Directors
also have meetings with Fidelity’s Head of Investment Companies
and attend educational days organised by the Manager.
During the reporting year, the Board held multiple ad hoc
Board meetings leading up to the successful completion of the
combination of assets with Henderson European Trust plc.
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.
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. All
Directors, with the exception of Paul Yates, will be standing for
election and re-election at this year’s AGM and their biographical
details are listed on pages 33 and 34. The terms and letters
of appointment of Directors are available for inspection at the
registered office of the Company.
Board Evaluation
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, except for every third year when
an external evaluation is undertaken. 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 as part of this process.
For the year under review, the performance and contribution to
the Company of each Director was considered using a written
questionnaire. The performance of the Chairman is evaluated by
the other Directors in the Chairman’s absence. It was concluded
that the Chairman and each Director have been effective and
that they continue to demonstrate commitment to their roles. The
Corporate Governance Statement continued
Board’s Attendance Record for the Reporting Year
Regular
Board
Meetings
Audit
Committee
Meetings
Management
Engagement
Committee
Meetings
Vivian Bazalgette
1
3/3 1/1 1/1
Vicky Hastings
2
1/1 1/1 n/a
Rutger Koopmans
2
1/1 1/1 n/a
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
3
5/5 1/1 1/1
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 until he retired from the Board on 8 May 2025.
2 Appointed on 29 September 2025.
3 Davina Walter attended all Audit Committee meetings as a non-executive Director until she was appointed as Chairman of the Board on 8 May 2025. Following this, she
is not a member of the Audit Committee but is invited to attend all of the meetings held.
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
evaluation found that the Board functioned well and had the right
balance of membership and skills.
As a FTSE 350 Company and in accordance with provision 21 of
the 2024 UK Corporate Governance Code, the Board will carry
out an externally facilitated Board performance review for the
Company’s year ending 31 December 2026.
Directors’ Remuneration and Share Interests
Details of the Directors’ remuneration and their share interests are
disclosed in the Directors’ Remuneration Report on page 44 and
page 46.
BOARD COMMITTEES
The Board has two Committees, as set out below, 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 Davina Walter, which is in line with the
recommendation of the 2024 UK Corporate Governance Code
that a chairman of a board should not be a member of an audit
committee. Mrs Walter 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 48 to 50.
Management Engagement Committee
Composition
The Management Engagement Committee is chaired by Davina
Walter 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 12 May 2026, the Committee has reviewed
the performance of the Manager and the current fee structure
(which was updated as part of the combination of assets with
Henderson European Trust plc) and also that of its peers. The
Committee 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 management fee structure
for the year ended 31December 2025 are in the Directors’
Report on page 35.
ACCOUNTABILITY AND AUDIT
Financial Reporting
Set out on page 47 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 51 to 58.
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
31December 2025 and up to the date of this report. This process
is in accordance with the FRC’s “Risk Management, Internal
Control and Related Financial and 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.
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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.
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 12 May 2026, details of which can be found on page 6.
Full details of the Notice of Meeting are on pages 86 to 89.
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 was passed at last year’s AGM
on 8 May 2025.
On Behalf of the Board
Davina Walter
Chairman
17 March 2026
Corporate Governance Statement continued
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Chairman’s Statement
The Directors’ Remuneration Report for the year ended
31December 2025 has been prepared under sections 420-422
of the Companies Act and in accordance with Schedule 8 of
The Large and Medium-sized Companies and Groups (Accounts
& Reports) Regulations 2008 as amended by the Companies
(Directors’ Remuneration and Audit (Amendment) Regulations
2025 (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.
Ordinary resolutions to approve the Directors’ Remuneration
Report and the Remuneration Policy will be put to shareholders
at the AGM on 12 May 2026.
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 51 to 58.
Directors’ Remuneration
The Board carried out its annual review on the level of Directors’
remuneration in comparison with other investment companies
of a similar size and/or mandate as well as considering that
fees paid were in line with industry practice. In determining
the Directors’ fees, the Board, as a whole, considered a
number of factors, including the increasing time commitment
and responsibility required, the level of skills and appropriate
experience and expertise necessary, the need for Directors
to continue to maintain an appropriate level of knowledge
of regulatory and compliance requirements in an industry
environment of increasing complexity. Fees payable to Directors
should be sufficient to attract and retain individuals of high
calibre with suitable knowledge and experience. Those Directors
chairing the Board and the Audit Committee should be paid
fees which are higher than other Directors in recognition of their
more demanding and complex roles. As well as usual Board
and Committees business, Directors have been required, and
are likely to continue to be required, to spend considerable time
in ad hoc meetings to address other issues such as the strategic
developments which have dominated the investment trust
sector over the past several years. An example of this was the
substantial increased workload and multiple meetings as part of
the combination with Henderson European Trust plc during 2025,
all outside of the normal course of Board meetings.
The annual fee structure from 1 January 2026 is as follows:
Role
1 January
2026
£
1 January
2025
£
Chairman 59,000 50,000
Senior Independent Director 38,500 36,500
Chair of the Audit Committee 46,000 39,000
Director 36,000 32,500
The Remuneration Policy stated in last year’s Annual Report is
proposed to be updated at this year’s AGM for the aggregate
fees payable to the Directors to a total of £350,000 per annum.
This is following approval by shareholders at the AGM last
year to update the Company’s Articles of Association in order
to do so. In addition, the Policy is being updated to allow for
consideration of additional remuneration for the Board if there
was significant additional work outside the Company’s normal
course of business. The proposed Policy is below.
The Remuneration Policy
The Company’s Articles of Association limit the aggregate fees
payable to the Directors to a total of £350,000 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. All Directors will be entitled to be considered for
additional remuneration in the event of significant additional work
outside of normal Company affairs. Directors are not entitled
to exit payments and are not provided with any compensation
for loss of office. Directors’ fees are paid monthly in arrears.
Directors do not serve a notice period if their appointment were
to be terminated.
The level of Directors’ fees is determined by the whole Board.
Directors do not vote on their own individual 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 2024 UK Corporate Governance Code, the Board will carry
out an externally facilitated evaluation every third year of its
performance. This 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 can
be obtained from the Company’s registered office.
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 stated in last year’s
Annual Report, was approved at the AGM on 10 May 2023 with
99.52% of votes cast in favour, 0.26% of votes cast against and
Directors’ Remuneration Report
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Annual Report 2025
0.22% of votes withheld. The proposed Policy, as set out above,
will be put to shareholders at the AGM on 12 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 2024 was approved at the AGM held on 8 May
2025 with 99.45% of votes cast in favour, 0.39% of votes cast
against and 0.16% of votes withheld.
The Directors’ Remuneration Report for the year ended
31December 2025 will be put to shareholders at the AGM
on 12May 2026, 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 2025 was £219,167 (2024: £185,917). 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 below.
Remuneration of Directors
2026 2025 2025 2025 2024 2024 2024
Projected
Fees
Fees
(Audited)
Taxable
Expenses
(Audited)
Total
(Audited)
Fees
(Audited)
Taxable
Expenses
(Audited)
Total
(Audited)
(£) (£) (£) (£) (£) (£) (£)
Vivian Bazalgette
1
n/a 18,013 – 18,013 48,000 – 48,000
Vicky Hastings
2
36,000 8,303 – 8,303 n/a n/a n/a
Rutger Koopmans
2
36,000 8,303 – 8,303 n/a n/a n/a
Fleur Meijs 46,000 39,000 – 39,000 37,250 – 37,250
Milyae Park
3
37,603 32,500 – 32,500 31,000 – 31,000
Sir Ivan Rogers 36,000 32,500 – 32,500 31,000 – 31,000
Davina Walter
4
59,000 44,048 – 44,048 5,167 – 5,167
Paul Yates
5
13,923 36,500 – 36,500 33,500 – 33,500
Total 264,526 219,167 – 219,167 185,917 – 185,917
1 Retired on 8 May 2025.
2 Appointed on 29 September 2025.
3 To be appointed as Senior Independent Director on 12 May 2026.
4 Appointed on 1 November 2024 as a non-executive Director and as Chairman of the Board on 8 May 2025.
5 Retiring on 12 May 2026.
Five Year Change Comparison in Directors’ Remuneration
The table below shows the change in Directors’ fees over the last five years.
Director 2025 2020 Change (%)
Chairman 50,000 41,500 +20.4
Senior Independent Director 36,500 29,500 +23.7
Audit Committee Chair 39,000 32,500 +20.0
Director 32,500 27,000 +20.4
Directors’ Remuneration Report continued
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Annual Report 2025
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Fidelity European Trust PLC
INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
Expenditure on 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
2025
£
31 December
2024
£
Expenditure on Directors’ Remuneration:
Fees and taxable expenses 219,167 185,917
Distributions to Shareholders:
Dividend payments 38,194,000 35,110,000
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 (Benchmark Index) for ten years to 31 December 2025.
Total return performance for ten years to 31 December 2025
+205.8%
+177.4%
Dec
23
Dec
24
Dec
25
Dec
15
Dec
16
Dec
17
Dec
18
Dec
19
Dec
20
Dec
21
Dec
22
80
100
120
140
160
180
200
220
240
260
280
300
320
+197.9%
NAV per ordinary share
Ordinary share price
FTSE World Europe ex UK Index
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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
2025
31 December
2024
Change
during year
Vivian Bazalgette
1
n/a 30,000 n/a
Vicky Hastings
2
38,264 n/a n/a
Rutger Koopmans
2
20,964 n/a n/a
Fleur Meijs 28,970 28,970 –
Milyae Park
3
12,300 10,000 2,300
Sir Ivan Rogers 8,749 8,749 –
Davina Walter
4
60,067 55,000 5,067
Paul Yates 32,000 32,000 –
1 Retired on 8 May 2025.
2 Held at appointment on 29 September 2025.
3 Purchase of shares.
4 Purchase of shares and dividend reinvestment. Shares held by self and connected person.
All Directors’ shareholdings remain unchanged as at the date of this report.
On Behalf of the Board
Davina Walter
Chairman
17 March 2026
Directors’ Remuneration Report continued
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Annual Report 2025
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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 accounting 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 17 March 2026 and signed on its behalf by:
Davina Walter
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 41 for further details) and the effectiveness
of the independent audit process and how this has been
assessed for the year ended 31 December 2025.
Composition of the Committee
The members of the Committee are myself as Chair and all of
the other Directors, except for Davina Walter, which is in line
with the recommendation in the 2024 UK Corporate Governance
Code that a Chairman of a Board should not be a member
of the Audit Committee. She 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 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 the 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 2025), the Committee has met three times and the Auditor attended the November
2025 and March 2026 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 limit.
• The Depositary’s oversight reporting.
• The Company’s revenue and expenses forecasts, including special dividends, and its Balance Sheet.
Also in the reporting year, the Committee oversaw a structured and transparent audit tender process to ensure fairness and
compliance with the FRC’s minimum standard requirements. See further details on page 50.
Report of the Audit Committee
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INFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGYGOVERNANCE
In addition, the following matters were also considered at the following meetings:
September 2025
• The Half-Yearly Report and Financial Statements for the six months ended 30 June 2025 and
recommendation of its approval to the Board.
• The Going Concern Statement.
• The interim dividend payment to be recommended to the Board for approval.
• Review of the Audit Committee’s Terms of Reference.
• Update on the audit tender process to appoint an independent auditor.
November 2025
• The Auditor’s audit plan for the Company’s year ending 31 December 2025, 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.
• Review of the Audit Committee’s Terms of Reference.
March 2026
• The Auditor’s findings from the audit of the Company.
• The Auditor’s performance, independence and the proposed appointment of
PricewaterhouseCoopers LLP (“PwC”) as the Company’s auditor from and including the
Company’s year ending 31 December 2026.
• 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, significant market and geopolitical events and regulatory changes on
the Company’s performance, prospects and operations.
• 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 2026.
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 47. 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 on any specific areas which require judgement in order to ensure that the Financial Statements
are fair, balanced and understandable.
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 2025 and how these issues were addressed.
Recognition of
investment income
Investment income is recognised in accordance with Accounting Policy Note 2 (e) on page 63. The
Manager (FIL Investment Services (UK) Limited) 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 trusts specific controls operated by the Manager, prepared by PwC, 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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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 page 64. 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 agreed upon procedures
report in connection with investment trust specific controls operated by the Manager, prepared by
PwC, 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 2025.
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 during 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 2025; and
• Feedback from the Manager on the audit of the Company.
The Committee concluded that the Auditor remained independent
and the audit process was effective.
Auditor’s Appointment and Audit Tenure
Ernst & Young LLP was appointed as the Company’s Auditor on
12 May 2016 following a formal audit tender process in 2015 and
will have been in place for 10 years in May 2026. Accordingly,
the Company conducted an audit tender process during the
reporting year. From the shortlisted firms who presented to a
subcommittee of the Audit Committee, a range of criteria was
covered, including industry experience and credentials; team
experience and continuity; audit approach; quality assurance;
independence of the firm; transition planning and fees and value
for money. As a result of this, PwC has been proposed by the
Board as the auditor to the Company from and including the
financial year ending 31 December 2026. A resolution to appoint
PwC as auditor to the Company will be proposed at the AGM on
12 May 2026.
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
which restrict the Company’s choice of auditor.
Audit Fees
Fees paid to the Auditor for the audit of the Company’s Financial
Statements are disclosed in Note 5 on page 66. The audit fee for
the year ended 31 December 2025 was £62,940, and included
an amount of £11,000 for additional audit work in relation to
the combination of assets with Henderson European Trust plc.
The audit fee for the prior year was £49,900, plus an amount of
£11,000 in respect of additional scope of work relating to the
transition of Fidelity’s reporting functions to JP Morgan and was
paid for by Fidelity.
Fleur Meijs
Chair of the Audit Committee
17 March 2026
Report of the Audit Committee continued
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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
2025 which comprise the Income Statement, the Statement of
Changes in Equity, the Balance Sheet and the related Notes 1
to 20, 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 2025 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 2027 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; 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 2027 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
• Risk of incorrect valuation or ownership of the investment portfolio, including derivatives
• Incorrect accounting for the combination transaction between the Company and
Henderson European Trust
Materiality
• Overall materiality of £22.21m which represents 1% of net asset value of the Company at
31 December 2025.
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 26 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
Refer to the Audit Committee Report (page 49);
Accounting Policies (page 63); and Note 3 of the
Financial Statements (page 65)
The Company has reported revenue of £57.62m
(2024: £53.67m).
The investment income receivable by the
Company during the year directly affects the
Company’s revenue return. 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.
Additionally, in accordance with the AIC SORP,
special dividends received by the Company
can be included in either the revenue or capital
columns of the Income Statement depending
on the commercial circumstances behind the
payments.
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;
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 2025 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
identified special dividends above our testing
threshold, we assessed the appropriateness of
management’s classification by reviewing the
underlying rationale of the distribution.
The results of
our procedures
identified no material
misstatements in
relation to the risk
of incomplete or
inaccurate revenue
recognition.
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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 50); Accounting Policies (page 64); and
Notes 10 and 11 of the Financial Statements
(pages 69 and 70).
The valuation of the listed investment portfolio
at 31 December 2025 was £2,189.23m (2024:
£1,487.77m). The Company also had net
derivative assets amounting to £2.33m (2024: net
derivative liabilities of £5.80m).
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 produced
by the Manager to identify prices that have
not changed around the year end and verified
whether the listed price is a valid fair value; and
We compared the Company’s investment
holdings as at 31 December 2025 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.
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
Incorrect accounting for the
combination transaction between the
Company and Henderson European
Trust (HET)
On 19 June 2025, the Company announced
a proposed combination of assets with
Henderson European Trust plc (“HET”) pursuant
to a scheme of reconstruction and members’
voluntary liquidation of HET. The proposal was
subsequently approved at the General Meeting
on 26 September 2025, and the transaction was
implemented shortly thereafter. The transaction
resulted in voluntary liquidation of HET and the
transfer of HET’s net assets to the Company
in return for the issue of new shares by the
Company on a formula asset value (“FAV”)
basis.
There is a risk that the net assets transferred
from HET to the Company are not recorded
accurately. There is also a risk that the issuance
of shares related to the transaction is incorrectly
accounted for and inadequately disclosed in the
Company’s Financial Statements.
We performed the following procedures:
We obtained an understanding of the process
for recording the transaction and calculating the
issuance of shares;
We reviewed the formula asset value
calculations and confirmed they agree to the
scheme of reconstruction;
We agreed the number of shares issued
pursuant to the combination transaction to the
London Stock Exchange announcements and
reconcile them to the Company’s accounting
records;
We agreed the cash, investments, loan notes
and other liabilities transferred to the Company
as part of the combination transaction to the
accounting records. We revalued the investments
using market prices and exchange rates from
an independent pricing vendor, traced the cash
transferred through bank statements and verified
the loan notes with the relevant agreements;
and
We reviewed the disclosures in the Financial
Statements to ensure the combination
transaction is correctly disclosed.
The results of our
procedures to date
identified no material
misstatement in
relation to the risk of
incorrect accounting
for the combination
transaction between
the Company and HET.
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 £22.21m
(2024: £15.63m), which is 1% (2024: 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.
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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% (2024: 75%)
of our planning materiality, namely £16.66m (2024: £11.72m).
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 £2.62m (2024: £2.35m) being 5% (2024: 5%) of revenue profit
before tax.
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 £1.11m (2024:
£0.78m), 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 35;
• 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 page 30;
• 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 35;
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
• Directors’ statement on fair, balanced and understandable
set out on page 47;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
page 25;
• The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems set out on page 41; and
• The section describing the work of the Audit Committee set
out on page 48.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement
set out on page 47, 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
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 10 years, covering
the years ending 31 December 2016 to 31 December 2025.
• The audit opinion is consistent with the additional report to
the Audit Committee.
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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
17 March 2026
Independent Auditor’s Report to the Members
of Fidelity European Trust PLC continued
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
Customer: Fidelity Project Title: FET Annual Report 2025 T: 0207 055 6500 F: 020 7055 6600
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Fidelity European Trust PLC
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Income Statement
for the year ended 31 December 2025
The Notes on pages 62 to 82 form an integral part of these Financial Statements.
Year ended 31 December 2025 Year ended 31 December 2024
Notes
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Gains/(losses) on investments 10 – 207,231 207,231 – (47,301) (47,301)
Gains on derivative instruments 11 – 27,618 27,618 – 35,423 35,423
Income 3 57,618 – 57,618 53,670 – 53,670
Investment management fees 4 (2,418) (7,253) (9,671) (2,878) (8,634) (11,512)
Other expenses 5 (1,079) – (1,079) (1,063) – (1,063)
Foreign exchange gains/(losses) – 1,889 1,889 – (2,956) (2,956)
Net return/(loss) on ordinary
activities before finance costs
and taxation 54,121 229,485 283,606 49,729 (23,468) 26,261
Finance costs 6 (1,771) (5,314) (7,085) (2,770) (8,309) (11,079)
Net return/(loss) on ordinary
activities before taxation 52,350 224,171 276,521 46,959 (31,777) 15,182
Taxation on return/(loss) on
ordinary activities 7 (3,165) – (3,165) (4,422) – (4,422)
Net return/(loss) on ordinary
activities after taxation for the
year 49,185 224,171 273,356 42,537 (31,777) 10,760
Return/(loss) per ordinary share 8 11.30p 51.50p 62.80p 10.41p (7.78p) 2.63p
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.
On 26 September 2025, the Company combined assets with Henderson European Trust plc (“HET”), following a scheme of
reconstruction. No other operations were acquired or discontinued during the year.
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Statement of Changes in Equity
for the year ended 31 December 2025
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 2024 10,411 58,615 5,414 1,440,810 47,879 1,563,129
Net return on ordinary
activities after taxation for the year – – – 224,171 49,185 273,356
New ordinary shares issued in
respect of the transaction with HET 16 2,798 458,644 – – – 461,442
Expenses in respect of the
transaction with HET – – – (406) – (406)
Repurchase of ordinary shares into
Treasury 15 – – – (38,097) – (38,097)
Dividends paid to shareholders 9 – – – – (38,194) (38,194)
Total shareholders’ funds at
31 December 2025 13,209 517,259 5,414 1,626,478 58,870 2,221,230
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
The Notes on pages 62 to 82 form an integral part of these Financial Statements.
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
Customer: Fidelity Project Title: FET Annual Report 2025 T: 0207 055 6500 F: 020 7055 6600
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Fidelity European Trust PLC
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Balance Sheet
as at 31 December 2025
Company number 2638812
Notes
31 December 2025
£’000
31 December 2024
£’000
Fixed assets
Investments 10 2,189,231 1,487,772
Current assets
Derivative instruments 11 2,333 –
Debtors 12 11,316 9,506
Amounts held at futures clearing houses and brokers 2,814 10,078
Cash and cash equivalents 47,710 63,042
64,173 82,626
Current liabilities
Derivative instruments 11 – (5,796)
Other creditors 13 (1,613) (1,473)
(1,613) (7,269)
Net current assets 62,560 75,357
Non current liabilities
Loan notes (unsecured) 14 (30,561) –
(30,561) –
Net assets 2,221,230 1,563,129
Capital and reserves
Share capital 15 13,209 10,411
Share premium account 16 517,259 58,615
Capital redemption reserve 16 5,414 5,414
Capital reserve 16 1,626,478 1,440,810
Revenue reserve 16 58,870 47,879
Total shareholders’ funds 2,221,230 1,563,129
Net asset value per ordinary share 17 434.39p 382.44p
The Financial Statements on pages 59 to 82 were approved by the Board of Directors on 17 March 2026 and were signed on its behalf by:
Davina Walter
Chairman
The Notes on pages 62 to 82 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 2027 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 and
the loan agreement, reviewed the liquidity of the investment portfolio, stress testing performed 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
as detailed in the Going Concern Statement on page 35.
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 26, 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 35 takes account of all events and conditions up to
31 March 2027 which is at least twelve months from the date of approval of these Financial Statements.
Issue of Ordinary Shares in respect of the transaction with Henderson European Trust plc (“HET”)
On 29 September 2025, the Company issued new ordinary shares which were provided to shareholders of HET, in connection with the
combination of the assets of the Company with the assets of HET.
The Directors have considered the substance of the assets and activities of HET in determining whether the acquisition represents the
acquisition of a business. In this case, the acquisition is not considered to be an acquisition of a business, and therefore, has not been
treated as a business combination. Rather, the cost to acquire the assets and liabilities of HET has been allocated between the acquired
identifiable assets and liabilities based on their relative fair values on the acquisition date without attributing any amount to goodwill or
to deferred taxes. Net assets transferred comprised investments, cash, loans, payables and HET contribution to the transaction. A total
of £462,717,000 of assets were acquired as a result of the transaction with HET. This comprised: investments of £478,394,000, cash of
£13,631,000, loan notes of -£30,522,000, payables of -£74,000 and a HET contribution to the transaction of £1,288,000.
Transaction costs of £892,000 in relation to the combination of HET have been recognised in the Income Statement in Note 10. Costs
of £406,000 in relation to issuing new shares have been recognised in the Statement of Changes in Equity.
Fidelity has agreed to make a material contribution by means of a waiver of the management fees that would otherwise be
payable, under the AIFM Agreement and the Investment Management Agreement, in respect of the net assets transferred by HET
to the Company following the combination of assets for the 12 month period immediately following the effective date. Fidelity’s total
contribution was £2,537,000 allocated £634,000 against Revenue and £1,903,000 against Capital.
Since 26 September 2025, the base investment management fee has been charged at an annual rate of 0.70% (previously 0.85%) on
the first £400 million of net assets, 0.65% (previously 0.65%) on net assets above £400 million and up to £1.4 billion, and 0.55% on net
assets in excess of £1.4 billion. Fees are payable monthly in arrears and are calculated on a daily basis.
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.
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
Customer: Fidelity Project Title: FET Annual Report 2025 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
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.
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 on the unsecured loans notes, overdrafts 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 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.
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Annual Report 2025
Notes to the Financial Statements continued
2 Accounting Policies continued
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
gains/(losses) on investments in the capital column of the Income Statement and has disclosed these costs in Note 10 on page 69.
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) Loan notes (unsecured)
Loan notes are initially included in the Financial Statements at cost, being the fair value of the consideration received net of any issue
costs relating to the borrowing. After initial recognition, the loans are measured at amortised cost using the effective interest rate
method. The amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement.
q) Other creditors
Other creditors include amounts payable on 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.
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
Customer: Fidelity Project Title: FET Annual Report 2025 T: 0207 055 6500 F: 020 7055 6600
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Annual Report 2025
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Fidelity European Trust PLC
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
2 Accounting Policies continued
r) 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.
3 Income
Year ended
31 December 2025
£’000
Year ended
31 December 2024
£’000
Investment income
Overseas dividends 50,142 42,870
UK dividends 2,182 1,654
Interest on securities 230 –
52,554 44,524
Derivative income
Income recognised from futures contracts 1,842 2,468
Dividends received on long CFDs 2,229 3,972
Interest received on CFDs – 329
4,071 6,769
Investment and derivative income 56,625 51,293
Other income
Interest received on collateral, bank deposits and money market funds 993 2,323
Interest received on tax reclaims – 54
993 2,377
Total income 57,618 53,670
No special dividends have been recognised in capital during the year (2024: £1,271,000).
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
Customer: Fidelity Project Title: FET Annual Report 2025 T: 0207 055 6500 F: 020 7055 6600
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Notes to the Financial Statements continued
4 Investment Management Fees
Year ended 31 December 2025 Year ended 31 December 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Investment management fees 3,052 9,156 12,208 2,878 8,634 11,512
Fee waived in respect of the transaction
with HET (634) (1,903) (2,537) – – –
Total 2,418 7,253 9,671 2,878 8,634 11,512
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.
Fidelity has agreed to make a material contribution by means of a waiver of the management fees that would otherwise be payable,
under the AIFM Agreement and the Investment Management Agreement, in respect of the net assets transferred by HET to the
Company following the combination of assets for the 12 month period immediately following the effective date.
Since 26 September 2025, the base investment management fee has been charged at an annual rate of 0.70% (previously 0.85%) on
the first £400 million of net assets, 0.65% (previously 0.65%) on net assets above £400 million and up to £1.4 billion, and 0.55% on net
assets in excess of £1.4 billion. 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.
5 Other Expenses
Year ended
31 December 2025
£’000
Year ended
31 December 2024
£’000
AIC fees 25 24
Custody fees 100 90
Depositary fees 54 63
Directors’ fees
1
219 186
Legal and professional fees 79 120
Marketing expenses 214 221
Printing and publication expenses 182 191
Registrars’ fees 104 91
Fees payable to the Company’s Independent Auditor for the audit of the Financial
Statements 72 50
Other expenses 30 27
1,079 1,063
1 Details of the breakdown of Directors’ fees are disclosed in the Directors’ Remuneration Report on page 44.
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
6 Finance Costs
Year ended 31 December 2025 Year ended 31 December 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Interest paid on collateral, unsecured loan
notes and overdrafts 79 236 315 15 43 58
Interest paid on CFDs 1,318 3,956 5,274 2,122 6,367 8,489
Costs recognised from futures contracts 374 1,122 1,496 633 1,899 2,532
1,771 5,314 7,085 2,770 8,309 11,079
Finance costs have been allocated 75% to capital reserve in accordance with the Company’s accounting policies. At the year end,
interest payable on the unsecured loan notes amounted to £200,000 (2024: £nil).
7 Taxation on Return/(Loss) on Ordinary Activities
Year ended 31 December 2025 Year ended 31 December 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
a) Analysis of the taxation charge for
the year
Overseas taxation 3,165 – 3,165 4,422 – 4,422
Taxation charge for the year
(see Note 7b) 3,165 – 3,165 4,422 – 4,422
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% (2024:
25%). A reconciliation of the standard rate of UK corporation tax to the taxation charge for the year is shown below:
Year ended 31 December 2025 Year ended 31 December 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Net return/(loss) on ordinary activities
before taxation 52,350 224,171 276,521 46,959 (31,777) 15,182
Net return/(loss) on ordinary activities
before taxation multiplied by the standard
rate of UK corporation tax of 25%
(2024: 25%) 13,088 56,043 69,131 11,740 (7,944) 3,796
Effects of:
Capital (gains)/losses not taxable
1
– (59,185) (59,185) – 3,709 3,709
Income not taxable (13,081) – (13,081) (11,131) – (11,131)
Expenses not deductible – 1,329 1,329 – 2,077 2,077
Excess management expenses (7) 1,813 1,806 (609) 2,158 1,549
Overseas taxation 3,165 – 3,165 4,422 – 4,422
Total taxation charge for the year (see
Note 7a) 3,165 – 3,165 4,422 – 4,422
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.
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Notes to the Financial Statements continued
7 Taxation on Return/(Loss) on Ordinary Activities continued
c) Deferred taxation
A deferred tax asset of £20,482,000 (2024: £18,676,000), in respect of excess expenses of £76,426,000 (2024: £69,202,000) and excess
loan interest of £5,505,000 (2024: £5,505,000), has not been recognised as it is unlikely that there will be sufficient future taxable
profits to utilise these expenses.
8 Return/(Loss) per Ordinary Share
Year ended
31 December 2025
Year ended
31 December 2024
Revenue return per ordinary share 11.30p 10.41p
Capital return/(loss) per ordinary share 51.50p (7.78p)
Total return per ordinary share 62.80p 2.63p
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 49,185 42,537
Net capital return/(loss) on ordinary activities after taxation 224,171 (31,777)
Total return on ordinary activities after taxation 273,356 10,760
Number Number
Weighted average number of ordinary shares held outside of Treasury 435,250,229 408,730,523
9 Dividends Paid to Shareholders
Year ended
31 December 2025
£’000
Year ended
31 December 2024
£’000
Dividends paid
Interim dividend of 3.90 pence per ordinary share paid for the year ended
31 December 2025 15,714 –
Final dividend of 5.50 pence per ordinary share paid for the year ended
31 December 2024 22,480 –
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
38,194 35,110
Dividends proposed
Final dividend of 6.00 pence per ordinary share proposed for the year ended 31
December 2025 30,548 –
Final dividend of 5.50 pence per ordinary share proposed for the year ended 31
December 2024 – 22,480
Total dividend proposed 30,548 22,480
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
9 Dividends Paid to Shareholders continued
The Directors have proposed the payment of a final dividend for the year ended 31 December 2025 of 6.00 pence per ordinary share
which is subject to approval by shareholders at the Annual General Meeting on 12 May 2026 and has not been included as a liability
in these Financial Statements. The dividend will be paid on 19 May 2026 to shareholders on the register at the close of business on
27 March 2026 (ex-dividend date 26 March 2026).
10 Investments
31 December 2025
£’000
31 December 2024
£’000
Investments held at fair value 2,189,231 1,487,772
Opening book cost 1,005,206 943,460
Opening investment holding gains 482,566 575,415
Opening fair value 1,487,772 1,518,875
Movements in the year
Purchases at cost 761,976 185,382
Assets acquired in respect of the transaction with HET
1
478,394 –
Costs in respect to the transaction with HET
1
892 –
Sales – proceeds (747,034) (169,184)
Gains/(losses) on investments 207,231 (47,301)
Closing fair value 2,189,231 1,487,772
Closing book cost 1,607,792 1,005,206
Closing investment holding gains 581,439 482,566
Closing fair value 2,189,231 1,487,772
1 See Accounting Policy Note 2 (a) on page 62 for further details.
The Company received £747,034,000 (2024: £169,184,000) from investments sold in the year. The book cost of these investments when
they were purchased was £637,784,000 (2024: £123,636,000). 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 gains/(losses) on investments
above, were as follows:
Year ended
31 December 2025
£’000
Year ended
31 December 2024
£’000
Purchases transaction costs 1,388 488
Sales transaction costs 176 70
1,564 558
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Notes to the Financial Statements continued
11 Derivative Instruments
Year ended
31 December 2025
£’000
Year ended
31 December 2024
£’000
Gains on derivative instruments
Gains on long CFD positions closed 20,597 41,187
Losses on short CFD positions closed (6,325) (8,418)
Gains on futures contracts closed 5,217 5,815
Movement in investment holding gains/(losses) on long CFDs 6,603 (2,246)
Movement in investment holding losses on short CFDs – (142)
Movement in investment holding gains/(losses) on futures 1,526 (773)
27,618 35,423
31 December 2025
Fair value
£’000
31 December 2024
Fair value
£’000
Derivative instruments recognised on the Balance Sheet
Derivative instrument assets 2,333 –
Derivative instrument liabilities – (5,796)
2,333 (5,796)
31 December 2025 31 December 2024
Fair value
£’000
Asset
exposure
£’000
Fair value
£’000
Asset
exposure
£’000
At the year end the Company held the following derivative
instruments
Long CFDs 1,928 200,209 (4,675) 196,659
Long futures 405 47,039 (1,121) 54,743
2,333 247,248 (5,796) 251,402
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
Customer: Fidelity Project Title: FET Annual Report 2025 T: 0207 055 6500 F: 020 7055 6600
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
12 Debtors
31 December 2025
£’000
31 December 2024
£’000
Accrued income 1,930 618
Taxation recoverable 9,014 8,807
Other debtors and prepayments 372 81
11,316 9,506
13 Other Creditors
31 December 2025
£’000
31 December 2024
£’000
Creditors and accruals 1,613 1,473
14 Loan notes (unsecured)
31 December 2025
£’000
31 December 2024
£’000
1.53% unsecured loan notes 2047 (Euro) 21,829 –
1.66% unsecured loan notes 2052 (Euro) 8,732 –
30,561 –
The Euro 25,000,000 1.53% unsecured loan notes 2047 were issued by HET on 31 January 2022 and are redeemable at par on
31 January 2047. They are shown on the balance sheet on the effective interest basis. HET issued the unsecured loan notes net of
issuance costs totalling £124,000.
The Euro 10,000,000 1.66% unsecured loan notes 2052 were issued by HET on 31 January 2022 and are redeemable at par on
31 January 2052. They are shown on the balance sheet on the effective interest basis. HET issued the unsecured loan notes net of
issuance costs totalling £50,000.
The issue costs for both series of loan notes are amortised over their respective terms. See Note 18 for more details on the estimate of
the fair value of the unsecured loan notes.
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Notes to the Financial Statements continued
15 Share Capital
31 December 2025 31 December 2024
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 (9,286,723) (232) – –
New ordinary shares issued in respect of the transaction with HET 111,902,155 2,798 – –
End of the year 511,345,955 12,784 408,730,523 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 9,286,723 232 – –
End of the year 17,004,110 425 7,717,387 193
Total share capital 13,209 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.
On 26 September 2025, the Company acquired £462.7 million of net assets from HET, in consideration for the issue of 111,902,155
new shares to HET shareholders as part of the combination of assets.
During the year, the Company repurchased 9,286,723 (2024: nil) ordinary shares and held them in Treasury. The cost of repurchasing
these shares of £38,097,000 (2024: £nil) was charged to the Capital Reserve.
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
16 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 2025 10,411 58,615 5,414 1,440,810 47,879 1,563,129
Gains on investments (see Note 10) – – – 207,231 – 207,231
Gains on derivative instruments
(see Note 11) – – – 27,618 – 27,618
Foreign exchange gains – – – 1,889 – 1,889
Investment management fees (see Note 4) – – – (7,253) – (7,253)
Finance costs (see Note 6) – – – (5,314) – (5,314)
New ordinary shares issued in respect of
the transaction with HET 2,798 458,644 – – – 461,442
Expenses in respect of the transaction with
HET
1
– – – (406) – (406)
Repurchase of ordinary shares
(see Note 15) – – – (38,097) – (38,097)
Revenue returns after taxation for the year – – – – 49,185 49,185
Dividends paid to shareholders (see Note 9) – – – – (38,194) (38,194)
At 31 December 2025 13,209 517,259 5,414 1,626,478 58,870 2,221,230
1 See Accounting Policy Note 2 (a) on page 62 for further details.
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
The capital reserve balance at 31 December 2025 includes investment holding gains of £581,439,000 (2024: gains of £482,566,000) as
detailed in Note 10. See Note 2 (r) for further details. The revenue and capital reserves are distributable by way of dividends.
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Notes to the Financial Statements continued
17 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.
31 December 2025 31 December 2024
Total shareholders’ funds £2,221,230,000 £1,563,129,000
Ordinary shares held outside of Treasury at year end 511,345,955 408,730,523
Net asset value per ordinary share 434.39p 382.44p
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.
18 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. 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 25 to 29.
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;
• Cash, liquid resources and short-term debtors and creditors that arise from its operations; and
• Bank borrowings
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 and on unsecured fixed rate loan facilities of Euro 25m expiring on 31 January 2047 and Euro 10m expiring on
31 January 2052. The level of gearing is reviewed by the Board and the Lead Portfolio Manager.
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
18 Financial Instruments continued
Interest rate risk exposure
The values of the Company’s financial instruments that are exposed to movements in interest rates are shown below:
31 December 2025
£’000
31 December 2024
£’000
Exposure to financial instruments that bear interest
Long CFDs – exposure less fair value 198,281 201,334
Unsecured loan notes 30,561 –
228,842 201,334
Exposure to financial instruments that earn interest
Amounts held at futures clearing houses and brokers 2,814 10,078
Cash and cash equivalents 47,710 63,042
50,524 73,120
Net exposure to financial instruments that bear interest 178,318 128,214
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 profile of the Company’s financial assets is shown below:
31 December 2025
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 1,392,580 196,947 5,975 47,067 1,642,569
Swiss franc 483,482 – 4,103 – 487,585
Danish krone 66,619 – 316 60 66,995
Swedish krona 117,415 – – – 117,415
US dollar – 50,301 – – 50,301
Norwegian krone 37,683 – – – 37,683
UK sterling 91,452 – 3,736 583 95,771
2,189,231 247,248 14,130 47,710 2,498,319
1 Debtors include amounts held at futures clearing houses and brokers.
2 Cash and cash equivalent are made up of £4,660,000 cash at bank and £43,050,000 held in Fidelity Institutional Liquidity Fund.
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Notes to the Financial Statements continued
18 Financial Instruments continued
31 December 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.
Currency exposure of financial liabilities
The currency profile of the Company’s financial liabilities is shown below:
31 December 2025
Currency
Unsecured
loan notes
£’000
Other
creditors
£’000
Total
£’000
Euro 30,561 107 30,668
US dollar – 87 87
UK sterling – 1,419 1,419
30,561 1,613 32,174
31 December 2024
Currency
Unsecured
loan notes
£’000
Other
creditors
£’000
Total
£’000
Euro – 200 200
US dollar – 78 78
UK sterling – 1,195 1,195
– 1,473 1,473
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.
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
18 Financial Instruments continued
Liquidity risk
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. The Company has the current
borrowing of Euro 25m expiring 31 January 2047 and Euro 10m expiring 31 January 2052.
Liquidity risk exposure
At 31 December 2025, contractual maturities of the financial liabilities at the year end, based on the earliest date on which payment
can be required are as follows:
31 December 2025
Within
one year
£’000
More than
one year
£’000
Total
£’000
Creditors and accruals 1,613 – 1,613
1.53% unsecured loan notes 2047 (Euro)
1
334 21,829 22,163
1.66% unsecured loan notes 2052 (Euro)
1
145 8,732 8,877
2,092 30,561 32,653
1 Acquired by the Company, as part of the combination with HET on 26 September 2025.
31 December 2024
Within
one year
£’000
More than
one year
£’000
Total
£’000
Derivative instruments 5,796 – 5,796
Creditors and accruals 1,473 – 1,473
7,269 – 7,269
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
31 December 2025 31 December 2024
Collateral
received
£’000
Collateral
pledged
£’000
Collateral
received
£’000
Collateral
pledged
£’000
J.P. Morgan Securities plc 1,600 – – 5,025
UBS AG – 2,814 50 5,053
1,600 2,814 50 10,078
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Notes to the Financial Statements continued
18 Financial Instruments continued
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 2025, 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 £1,478,000 (2024: increased the net loss and increase the net assets by £1,282,000).
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 (2024: decreased the net loss and decreased the
net assets) by the following amounts:
Currency
31 December 2025
£’000
31 December 2024
£’000
Euro 146,536 108,967
Swiss franc 44,326 27,205
Swedish krona 10,674 8,390
Danish krone 6,090 7,782
US dollar 4,565 3,415
Norwegian krone 3,426 2,330
215,617 158,089
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Fidelity European Trust PLC
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
18 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 (2024: increased the net loss and increased the
net assets) by the following amounts:
Currency
31 December 2025
£’000
31 December 2024
£’000
Euro 179,100 133,182
Swiss franc 54,176 33,251
Swedish krona 13,046 10,254
Danish krone 7,444 9,512
US dollar 5,579 4,174
Norwegian krone 4,187 2,848
263,532 193,221
Other price risk – exposure to investments sensitivity analysis
Based on the investments held and share prices at 31 December 2025, 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 £218,923,000 (2024: increased the net loss and increased the net assets by £148,777,000). 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 2025, 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 £24,725,000 (2024: increased the net loss and increased
the net assets by £25,140,000). 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. The exception are the Euro unsecured
bank loans, their fair value having been calculated by discounting future cash flows at current Euro interest rates.
31 December 2025
At fair value
£’000
At amortised cost
£’000
1.53% unsecured loan notes 2047 (Euro) 21,433 21,829
1.66% unsecured loan notes 2052 (Euro) 8,481 8,732
Total 29,914 30,561
The unsecured loan notes were acquired as a result of the transaction with HET.
In order to comply with fair value accounting disclosures only, the fair value of the unsecured loan notes has been estimated to be
£29,914,000 (2024: £nil) and is categorised as Level 3 in the fair value hierarchy as described below. However, for the purpose of the
daily NAV announcements, the unsecured loan notes are valued at par in the NAV because they are not traded and the Directors
expect them to be held to maturity and, accordingly, the directors have assessed that this is the most appropriate value to be applied
for this purpose.
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18 Financial Instruments continued
The estimate of the fair value of each unsecured loan note is calculated by aggregating the discounted value of future cash flows,
being the contractual interest payments and the repayment of capital at maturity as each note falls due. The discount rate used
for each note is based on the yield of the reference instrument that was used in the pricing of each loan note plus the same credit
spread applied at the issue. The net assets including the unsecured loan notes at fair value would have been £2,221,877,000 at
31 December 2025 (compared to £2,221,230,000 with the unsecured loan notes at par value), equivalent to a net asset value per
ordinary share of 434.52p (compared to 434.39p with loan notes at par value).
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
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.
31 December 2025
Financial assets at fair value through profit or loss
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Investments 2,189,231 – – 2,189,231
Derivative instrument assets 405 1,928 – 2,333
2,189,636 1,928 – 2,191,564
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities – – – –
31 December 2024
Financial assets at fair value through profit or loss
Level 1
£’000
Level 2
£’000
Level 3
£’000
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)
Notes to the Financial Statements continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
18 Financial Instruments continued
In the event that the Company decided to pay back the loan notes earlier than the maturity date, the loan note agreements include
certain clauses that may require additional payments to be made. These clauses are primarily to protect the lender from any losses
suffered from early repayment. Such ‘make-whole amounts’ are based on any excess of the discounted value of the remaining
scheduled payments over the life of the unsecured loan notes above the value of the principal. The make-whole amount cannot be
less than zero. The directors have assessed that the likelihood of early repayment is considered to be highly unlikely to occur.
19 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 61, 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 23. The principal risks and their management are disclosed in
the Strategic Report on pages 25 to 29 and in Note 18.
The Company’s gross gearing and net gearing at the year end is set out below:
31 December 2025
Gross gearing Net gearing
Asset
exposure
£’000 %
1
Asset
exposure
£’000 %
1
Investments 2,189,231 98.6 2,189,231 98.6
Long CFDs 200,209 9.0 200,209 9.0
Long futures 47,039 2.1 47,039 2.1
Total long exposures 2,436,479 109.7 2,436,479 109.7
Gross asset exposure/net market exposure 2,436,479 109.7 2,436,479 109.7
Shareholders’ funds 2,221,230 2,221,230
Gearing
2
9.7 9.7
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.
31 December 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
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.
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20 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 35. During the year, the following expenses were
payable to FII:
31 December 2025
£’000
31 December 2024
£’000
Management fees 12,208 11,512
Marketing services 214 221
At the Balance Sheet date, the following balances payable to FII were accrued and included in other creditors:
31 December 2025
£’000
31 December 2024
£’000
Management fees 1,237 972
Marketing services – 53
As at 31 December 2025, the Board consisted of seven non-executive Directors, all of whom are considered to be independent by the
Board. None of the Directors have a service contract with the Company.
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 page 44 and page 46. In
addition to the fees and taxable expenses disclosed in the Directors’ Remuneration Report, £21,000 (2024: £20,000) of Employers’
National Insurance Contributions was also paid by the Company. As at 31 December 2025, Directors’ fees of £25,000 (2024: £22,000)
were accrued and payable.
Notes to the Financial Statements continued
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GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
The Company uses the following as Alternative Performance Measures and these are all defined in the Glossary of Terms on pages
93 to 95.
Discount/Premium
Details of the Company’s discount are on the Financial Highlights page.
Gearing
See Note 19 on page 81 for details of the Company’s gearing (both gross and net).
Net Asset Value (“NAV”) per Ordinary Share
See the Balance Sheet on page 61 and Note 17 on page 74 for further details.
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.
31 December 2025 31 December 2024
Investment management fees (£’000) 12,208 11,512
Other expenses (£’000) 1,079 1,063
Ongoing charges (£’000) 13,287 12,575
Fee waivers in respect of the transaction with HET (£’000) (2,537) –
Ongoing charges ratio 0.73% 0.76%
Ongoing charges ratio including fee waivers 0.59% 0.76%
Revenue, Capital and Total Returns per Share
See the Income Statement on page 59 and Note 8 on page 68 for further details.
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 2025 and 31 December 2024.
2025
Net asset
value per
ordinary
share
Ordinary
share
price
31 December 2024 382.44p 352.00p
31 December 2025 434.39p 416.50p
Change in year +13.6% +18.3%
Impact of dividend reinvestments +2.6% +2.8%
Total return for the year +16.2% +21.1%
Alternative Performance Measures
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Annual Report 2025
2024
Net asset
value per
ordinary
share
Ordinary
share
price
31 December 2023 383.39p 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 continued
Job No: 104158 Proof Event: 11 Black Line Level: 2 Park Communications Ltd Alpine Way London E6 6LA
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Annual Report 2025
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Fidelity European Trust PLC
GOVERNANCEINFORMATION FOR SHAREHOLDERS FINANCIAL STRATEGY
Financial Calendar
The key dates in the Company’s calendar are:
31 December 2025 – Financial Year End
March 2026 – Announcement of the annual results for the year to 31 December 2025
March 2026 – Publication of this Report
26 March 2026 – Ex-Dividend date
27 March 2026 – Dividend Record date
12 May 2026 – Annual General Meeting
19 May 2026 – Payment of Final Dividend
30 June 2026 – Half-Year End
September 2026 – Announcement of the Half-Yearly results for the six months to 30 June 2026
September 2026 – Publication of the Half-Yearly Report
September 2026 – Ex-Dividend and Record dates
November 2026 – Payment of Interim Dividend
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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 Tuesday, 12 May 2026 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 2025.
2. To declare that a final dividend for the year ended
31December 2025 of 6.00 pence per ordinary share be
paid to shareholders on the register as at close of business
on 27March 2026.
3. To elect Mrs Vicky Hastings as a Director.
4. To elect Mr Rutger Koopmans as a Director.
5. To re-elect Ms Fleur Meijs as a Director.
6. To re-elect Ms Milyae Park as a Director.
7. To re-elect Sir Ivan Rogers as a Director.
8. To re-elect Mrs Davina Walter as a Director.
9. To approve the Directors’ Remuneration Report (excluding
the section headed “The Remuneration Policy” set out on
page 43) for the year ended 31 December 2025.
10. To approve the Directors’ Remuneration Policy as stated in
the Directors’ Remuneration Report on page 43.
11. To appoint PricewaterhouseCoopers 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.
12. 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 Resolution 13 will be proposed
as an ordinary resolution and Resolutions 14 and 15 will be
proposed as special resolutions.
Authority to Allot Ordinary Shares and Disapply Pre-Emption
Rights
Resolutions 13 and 14 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 17 March 2026. 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.
13. 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 £660,437 (approximately 5%
of the aggregate nominal amount of the issued share capital
of the Company (including Treasury shares) as at 17 March
2026) 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.
14. THAT, subject to the passing of Resolution 13, 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 13
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 £660,437
(approximately 5% of the aggregate nominal amount
of the issued share capital of the Company (including
Treasury shares) as at 17 March 2026); 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.
INFORMATION FOR SHAREHOLDERS
Notice of Meeting
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Fidelity European Trust PLC
FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
Authority to Repurchase Shares
Resolution 15 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
17 March 2026, either for immediate cancellation or for retention
as Treasury shares, at the determination of the Board. 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 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.
15. 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 76,318,040;
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.
By Order of the Board
FIL Investments International
Secretary
17 March 2026
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 https://uk.investorcentre.mpms.mufg.com/, you will
need to log in to your Investor Centre account or register if
you have not previously done so. Once you have setup your
account you will need to add your shareholding by clicking
‘Add Holding’ in the ‘Portfolio’ section and following the
on-screen instructions. You will require your Investor Code
(IVC) to add your shareholding. You can find your IVC on
your Form of Proxy, on your share certificate, or by contacting
our Registrar, MUFG Corporate Markets. Alternatively,
shareholders can vote via the Investor Centre app, which is
a free app for smartphone and tablet provided by MUFG
Corporate Markets (the company’s Registrar). It allows you
to securely manage and monitor your shareholdings in real
time, take part in online voting, keep your details up to date,
access a range of information including payment history
and much more. The app is available to download on both
the Apple App Store and Google Play, or by scanning the
relevant QR code below.
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
11:00on Friday, 8 May 2026. 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.
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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 on Friday, 8 May 2026. 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
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 on Friday, 8 May 2026.
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 on Friday, 8 May 2026 in order to be considered
valid or, if the meeting is adjourned, by the time which is 48
hours before the time of the adjourned meeting. 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 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 Friday, 8 May 2026. 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 to vote and ask
questions via the platform, shareholders will need to connect to
the following site https://meetings.lumiconnect.com/100-968-
191-255. 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 tablet,
smartphone or computer.
Once you have accessed https://meetings.lumiconnect.
com/100-968-191-255 from your device, you will 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 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 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 72 hours
(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://meetings.
lumiconnect.com/100-968-191-255 from your web browser on
a tablet or computer, 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 09:00 to 17:30. 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
Notice of Meeting continued
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
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
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 Friday, 8 May 2026. 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 the latest practicable date prior to the publication of
this document, the Company’s issued share capital consisted
of 528,350,065 ordinary shares. The number of shares held
by the Company in Treasury was 19,223,610. Therefore, the
total number of shares with voting rights in the Company was
509,126,455.
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.
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.
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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: +44 (0) 371 664 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
https://uk.investorcentre.mpms.mufg.com/. Shareholders are
able to manage their shareholding online by registering for the
Investor 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 +44 (0) 371 664 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).
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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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
Managers and Advisers
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 (for the year ended
31 December 2025)
25 Churchill Place
London
E14 5EY
PricewaterhouseCoopers LLP
(for the financial year
ending 31 December 2026)
7 More London Riverside
London
SE1 2RT
Lawyer
Simmons & Simmons LLP
1 Ropemaker Street
London
EC2Y 9SS
Registrar
MUFG Corporate Markets
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.
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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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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
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 derivative).
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 or other financial instrument.
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. The discount is shown as a percentage of
the net asset value per ordinary share.
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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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).
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
The amount by which Gross Asset Exposure exceeds
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
The amount by which Net Market Exposure exceeds
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 and Marcel Stötzel are the Portfolio Managers of
the Company and are responsible for managing the Company’s
assets.
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.
Glossary of Terms continued
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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
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
• 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.
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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 35.
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 23 and 24.
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 25 to 29 and in Note 18 to the Financial
Statements on pages 74 to 81.
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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FINANCIAL GOVERNANCEINFORMATION FOR SHAREHOLDERS STRATEGY
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 2025, actual leverage was 1.12
for the Gross Method and 1.12 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 18 on page 77.
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 2025, 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) 1,828 0.08% 1,600 –
UBS AG 100 0.00% – –
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 2025 from CFDs was a gain of £38,420,000.
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Annual Report 2025
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Investment Companies
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FIL Investments International (Company No. 1448245) FIL Investment Services (UK) Limited (Company No. 2016555) Financial Administration
Services Limited (Company No. 1629709) FIL Pensions Management (Company No. 2015142) and FIL Life Insurance Limited (Company No.
3406905). All these companies are registered in England and Wales with their registered office being Beech Gate, Millfield Lane, Lower
Kingswood, Tadworth, Surrey KT20 6RP. All these companies are authorised and regulated by the Financial Conduct Authority with the
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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Annual Report 2025