OREANDA-NEWS. Fidelity European Values (FEV) is an actively managed closed-end fund with a focus on continental Europe. The manager aims to achieve long-term growth through investing in a diversified portfolio of companies able to grow dividends consistently over a three- to five-year time horizon. NAV total return performance has been ahead of the FTSE World Europe ex-UK index benchmark over one, three, five and 10 years. With market valuations implying improving earnings growth, the manager highlights increasing confidence in the European corporate earnings outlook, seeing above-average earnings and dividend growth prospects in the near term.

Although the European market rally over the last seven months has pushed the forward P/E multiple to a 10-year high, the current 15.9x multiple represents only a 2% premium to world markets and stands at a 9% discount to the US market. European earnings growth is expected to outpace the US significantly in 2015 with consensus forecast EPS growth of 34% for the FTSE World Europe ex-UK index compared with 5% for the FTSE USA index. Contributing to this, and potentially offering the hope of positive earnings surprises for the current year and beyond, have been recent currency and oil price weakness. In addition, quantitative easing by the ECB has the potential to support current valuation levels.