Half-year Report

FIDELITY EUROPEAN TRUST PLC

Half-Yearly Results for the six months ended 30 June 2024 (unaudited)

Financial Highlights:

• The Board of Fidelity European Trust PLC (the “Company”) declares an interim dividend of 3.60 pence per share, an increase of 10.4% on the prior year.

• In the six-month period ended 30 June 2024, the Company reported a net asset value (NAV) return of +7.6% and ordinary share price total return of +10.6% outperforming the Benchmark Index, the FTSE World Europe (ex UK) Index, which returned +7.1%.

• Holdings in ASML, Novo Nordisk and 3i Group were key drivers of performance.

Contacts

For further information, please contact:

Smita Amin

Company Secretary

01737 836347

Portfolio Managers’ Half-Yearly Review

Performance Review
During the first six months of the year, the net asset value (“NAV”) total return was +7.6% compared to a total return of +7.1% for the FTSE World Europe (ex UK) Index, which is the Company’s Benchmark Index. The share price total return was +10.6%, which is above the NAV total return because of a narrowing of the share price discount to NAV. (All figures in UK sterling.)

Market Review
In the first half of this year, continental European markets were boosted by the resilience of global economic growth and the anticipation of interest rate reductions given lower rates of inflation. The European Central Bank (ECB) duly obliged with a quarter of a percentage point cut in its interest rate in early June, following cuts by the Swiss and Swedish central banks.

Despite the Labour Party having a big lead in the polls ahead of the UK general election, UK sterling appreciated by 2% against the Euro during the six month period. Therefore, in Euro terms, the continental European benchmark rose by more than 9%, with many of the constituent country markets hitting all time highs, before cooling off somewhat at the very end of the period when President Macron of France unexpectedly announced snap parliamentary elections.

The “growth” themes that had led markets higher last year continued to dominate performance in this period. The perceived long-term impact of generative Artificial Intelligence (“AI”) remained an area of optimism, not only for specific technology providers, but also for corporate productivity in general. Obesity medications, which have to date seen strong launches, also continued to attract investors’ admiration. In addition, some “value” sectors also performed very strongly, in particular the banking sector, which continued to report substantial earnings and dividends, helped by high levels of net interest income and low levels of credit losses.

PORTFOLIO MANAGERS’ REPORT
The company’s NAV total return outperformed the Company’s Benchmark over the six month reporting period. The gearing of the Company, given rising markets, was the main contributor to this outperformance. The contribution from stock-picking was mixed during this period.

Two of the largest holdings in the Company, namely ASML (AI) and Novo Nordisk (obesity), saw impressive gains as a result of the themes mentioned above. 3i Group also continued to climb following a positive presentation, highlighting the longer-term growth potential of its largest investment Action, its continental European discount retail group. Two of the Company’s Southern European bank holdings — Intesa Sanpaolo and Bankinter — were also very strong performers, in keeping with the banking sector. Bankinter has recovered well from a poor twelve month period when investors’ confidence was rattled by the regional banking crisis in the US.

Detractors from performance included a number of names in the consumer sector, such as L’Oréal, Nestlé and LVMH Moët Hennessy. Consumers in the US have been more restrained now that pandemic savings have been spent. The recovery in consumer spending in China has been more anaemic than expected, and has not been able to offset weaker trends elsewhere. Finally, there were a number of stock-specific disappointments. The most notable was Dassault Systèmes, which reported disappointing results and a muted outlook particularly relating to Medidata, a supplier of software for clinical trials, which they acquired in 2019.

Top Five Stock Contributors (on a relative basis)	Sector	Country	%
ASML	Information Technology	Netherlands	0.8
Novo Nordisk	Health Care	Denmark	0.8
3i Group	Financials	UK	0.6
SAP	Information Technology	Germany	0.5
Bankinter	Financials	Spain	0.3
			=========

Top Five Stock Detractors (on a relative basis)	Sector	Country	%
Dassault Systèmes	Information Technology	France	-0.5
L'Oréal	Consumer Staples	France	-0.5
Partners Group	Financials	Switzerland	-0.4
Nestlé	Consumer Staples	Switzerland	-0.4
SIG Group	Materials	Switzerland	-0.3
			=========

Outlook
The COVID-19 global pandemic — a “once in a century” event — has set off a long-lasting chain reaction that is unpredictable and makes fools of forecasters (including the Company’s Portfolio Managers!). We thought the rapid and steep monetary tightening which followed the pandemic would end in recession, as it so often does, following an inversion of the yield curve. That has not, to date, been the case. Indeed, the global economy has been much more resilient than anticipated and corporate earnings have held up well supporting stock markets around the world. As highlighted above, many stock markets are reaching all-time highs. However, we are now seeing some signs of consumers reining in their spending, particularly in the US. Consumption is the main growth engine of developed economies. Is this an early warning sign that the dreaded recession is upon us just as the optimists declare victory? To add to this, there is considerable geopolitical uncertainty expected post the US elections, not least the potential changes in US foreign policy when it comes to the tragic Ukraine war. In the event of a downturn, stubborn inflationary pressures could prevent a rapid easing in monetary policy. Continental European governments remain heavily indebted and are already running substantial budget deficits so fiscal easing would also be constrained. Valuations no longer discount an economic malaise. So, in short, we are cautious and see the stock market as being vulnerable if the outlook worsens and sentiment shifts to be more negative.

Whatever the constitution of the new French government following the result of the French parliamentary elections, we have little optimism regarding the short or long-term outlook for the French domestic economy for the same reasons that we are gloomy about the outlook for the domestic economies of Europe (which represent about one third of the sales and profits of continental European companies). Ageing populations, low productivity, high and growing levels of government debt, etc., will mean that growth is likely to remain anaemic. Thankfully, domestic France represents a relatively small percentage of sales and profits for continental European companies.

However, whatever our views on the outlook, we will maintain gearing within the prescribed range and we will continue to focus on attractively valued companies with strong balance sheets that should be resilient, and able to grow dividends, even in a more difficult environment.

SAM MORSE
Portfolio Manager

MARCEL STÖTZEL
Co-Portfolio Manager
2 August 2024

Twenty Largest Holdings as at 30 June 2024

The Asset Exposures shown below measure exposure to market price movements as a result of owning shares and derivative instruments. The Fair Value is the realisable value of the investments as reported in the Balance Sheet. Where a contract for difference (“CFD”) is held, the Fair Value reflects the profit or loss on the contract since it was opened and is based on how much the share price of the underlying share has moved.

	Asset Exposure		Fair  Value
	£’000	%1	£’000
Long Exposures – shares unless otherwise stated
Novo Nordisk
Pharmaceuticals & Biotechnology	135,335	8.0	135,335
ASML
Technology Hardware & Equipment	126,510	7.5	126,510
Nestlé
Food Producers	92,647	5.5	92,647
SAP (long CFD)
Software & Computer Services	76,830	4.6	4,792
LVMH Moët Hennessy
Personal Goods	73,704	4.4	73,704
TotalEnergies
Oil, Gas & Coal	73,565	4.4	73,565
Roche
Pharmaceuticals & Biotechnology	67,402	4.0	67,402
L'Oréal
Personal Goods	58,593	3.5	58,593
EssilorLuxottica
Medical Equipment & Services	56,079	3.3	56,079
3i Group
Investment Banking & Brokerage Services	49,769	2.9	49,769
Hermès International
Personal Goods	47,208	2.8	47,208
Legrand (long CFD)
Electronic & Electrical Equipment	45,366	2.7	(2,067)
Partners Group
Investment Banking & Brokerage Services	44,027	2.6	44,027
Sanofi
Pharmaceuticals & Biotechnology	43,126	2.5	43,126
Long Exposures – shares unless otherwise stated
Deutsche Börse Group
Investment Banking & Brokerage Services	42,980	2.5	42,980
Assa Abloy
Construction & Materials	40,715	2.4	40,715
Linde (long CFD)
Chemicals	39,348	2.3	25
Sampo
Non-Life Insurance	36,380	2.1	36,380
Kone
Industrial Engineering	34,975	2.1	34,975
Intesa Sanpaolo
Banks	34,853	2.1	34,853
	---------------	---------------	---------------
Twenty largest long exposures	1,219,412	72.2	1,060,618
	=========	=========	=========
Other long exposures	586,379	34.8	568,018
	---------------	---------------	---------------
Total long exposures before long futures2,3	1,805,791	107.0	1,628,636
	=========	=========	=========
Long Futures
EURO STOXX 50 Future September 20243	69,923	4.1	531
	---------------	---------------	---------------
Total long exposures after long futures3	1,875,714	111.1	1,629,167
	=========	=========	=========
Short Exposures
Short CFDs (1 Holding)	12,990	0.8	(257)
	---------------	---------------	---------------
Gross Asset Exposure3,4	1,888,704	111.9
	=========	=========
Portfolio Fair Value5			1,628,910
Net current assets (excluding derivative assets and liabilities)			59,173
			---------------
Shareholders’ Funds (per Balance Sheet below)			1,688,083
			=========

1 Asset Exposure is expressed as a percentage of Shareholders’ Funds.

2 Total long exposures before long futures comprises investments of £1,626,177,000 and long CFDs of £179,614,000.

3 See Note 13 below.

4 Gross Asset Exposure comprises market exposure to investments of £1,626,177,000 plus market exposure to all derivative instruments of £262,527,000. Derivative instruments comprise long CFDs of £179,614,000, long futures of £69,923,000 and short CFDs of £12,990,000.

5 Portfolio Fair Value comprises investments of £1,626,177,000 plus derivative assets of £5,348,000 less derivative liabilities of £2,615,000 (per the Balance Sheet below).

Interim Management Report and Directors’ Responsibility Statement

Interim Dividend
As part of their investment process, the Portfolio Managers focus on companies capable of growing their dividends over time. The Board does not impose any income objective in any particular period, recognising that both capital and income growth are components of performance, as reflected in the investment objective of the Company. The Board does, however, have a policy whereby it seeks to pay a progressive dividend in normal circumstances, paid twice yearly in order to smooth dividend payments for the reporting year. Unlike open-ended funds such as OEICs, investment trusts can hold back some of the income they receive in good years, thereby building up revenue reserves that can then be used to supplement dividends during challenging times.

The Company’s revenue return for the six months to 30 June 2024 was 8.38 pence per ordinary share (30 June 2023: 7.38 pence). The Board has declared an interim dividend of 3.60 pence per ordinary share which is an increase of 10.4% on the 3.26 pence per ordinary share paid as the interim dividend in 2023. This will be paid on 25 October 2024 to shareholders on the register at close of business on 20 September 2024 (ex-dividend date 19 September 2024).

Shareholders may choose to reinvest their dividends for additional shares in the Company.

Discount Management and Treasury Shares
The Board has an active discount management policy, the primary purpose of which is to reduce discount volatility. It seeks to maintain the discount in single digits in normal market conditions. Buying shares at a discount also results in an enhancement to the NAV per ordinary share.

In order to assist in managing the discount, the Board has shareholder approval to hold ordinary shares repurchased by the Company in Treasury, rather than cancelling them. Shares in Treasury are then available to be re-issued 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.

In the reporting period and up to the date of this report, the discount remained in single digits and the Company did not repurchase any ordinary shares into Treasury or for cancellation.

Principal Risks and Uncertainties
The Board, with the assistance of the Manager (FIL Investment Services (UK) Limited), 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 faced by the Company.

The Board considers that the principal risks and uncertainties faced by the Company continue to fall into the following categories: geopolitical, economic and market risks; investment performance (including the use of derivatives and gearing) risk; regulatory (including tax) risk; key person risk; environmental, social and governance (ESG) risks; cybercrime and information security risks; discount control risk; and business continuity risk. Information on each of these risks is given in the Strategic Report section of the Annual Report for the year ended 31 December 2023 which can be found on the Company’s pages of the Manager’s website at www.fidelity.co.uk/europe.

While the principal risks and uncertainties remain the same as those at the last year end, the magnitude of their uncertainty continues to grow with the ongoing conflicts in Ukraine and the Middle East, deglobalisation trends and significant supply disruption, fears of global recession amid inflationary pressures and financial distress dominating political risks and industry concerns. Trade and technology concerns between the US and China, and China and Taiwan, are exacerbating economic headwinds, such as the cost of living crisis, inflation, high interest rates and the threat of cyberattacks on critical infrastructure. The Board remains vigilant about the changing scale of such risks.

Climate change continues to be a key principal risk confronting asset managers and their investors. Globally, climate change effects are already being experienced in the form of changing weather patterns. Climate change can potentially impact the operations of investee companies, their supply chains and their customers. Additional risks may also arise from increased regulations, costs and net-zero programmes which can all impact investment returns. The Board notes that the Manager has integrated ESG considerations, including climate change, into the Company’s investment process. The Board will continue to monitor how this may impact the Company as a risk, the main risk being the impact on investment valuations and potentially shareholder returns.

The Board and the Manager are also monitoring the emerging risks posed by the rapid advancement of artificial intelligence (AI) and technology and how it may threaten the Company’s activities and its potential impact on the portfolio and investee companies. Although advances in computing power mean that AI is a powerful tool that will impact society, there are risks from its increasing use and manipulation with the potential to harm, including a heightened threat to cybersecurity.

Investors should be prepared for market fluctuations and remember that holding shares in the Company should be considered to be a long-term investment. Risks are mitigated by the investment trust structure of the Company which means that the Portfolio Managers are not required to trade to meet investor redemptions. Therefore, investments in the Company’s portfolio can be held over a longer-time horizon.

The Manager has appropriate business continuity and operational resilience plans in place to ensure the continued provision of services. This includes investment team key activities, including those of portfolio managers, analysts and trading/support functions. The Manager reviews its operational resilience strategies on an ongoing basis and continues to take all reasonable steps in meeting its regulatory obligations, assess its ability to continue operating and the steps it needs to take to serve and support its clients, including the Board.

The Company’s other third-party service providers also have similar measures in place to ensure that business disruption is kept to a minimum.

Transactions with the Manager and Related Parties
The Manager has delegated the Company’s portfolio management and company secretariat services to FIL Investments International. Transactions with the Manager and related party transactions with the Directors are disclosed in Note 14 to the Financial Statements below.

Going Concern Statement
The Directors have considered the Company’s investment objective, risk management policies, liquidity risk, credit risk, capital management policies and procedures, the nature of its portfolio and its expenditure and cash flow projections. The Directors, having considered the liquidity of the Company’s portfolio of investments (being mainly securities which are readily realisable) and the projected income and expenditure, are satisfied that the Company is financially sound and has adequate resources to meet all of its liabilities and ongoing expenses and can continue in operational existence for a period of at least twelve months from the date of this Half-Yearly Report.

This conclusion also takes into account the Board’s assessment of the ongoing risks as outlined above.

Accordingly, the Financial Statements of the Company have been prepared on a going concern basis.

Continuation votes are held every two years and the next continuation vote will be put to shareholders at the Annual General Meeting in 2025.

BY ORDER OF THE BOARD
FIL Investments International
2 August 2024

DIRECTORS’ RESPONSIBILITY STATEMENT
The Disclosure and Transparency Rules (“DTR”) of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements.

The Directors confirm to the best of their knowledge that:

a) The condensed set of Financial Statements contained within the Half-Yearly Report has been prepared in accordance with the Financial Reporting Council’s Standard FRS Interim Financial Reporting; and

b) The Portfolio Managers’ Half-Yearly Review and the Interim Management Report above, include a fair review of the information required by DTR 4.2.7R and 4.2.8R.

In line with previous years, the Half-Yearly Report has not been audited or reviewed by the Company’s Independent Auditor.

The Half-Yearly Report was approved by the Board on 2 August 2024 and the above responsibility statement was signed on its behalf by Vivian Bazalgette, Chairman.

FINANCIAL STATEMENTS

Income Statement for the six months ended 30 June 2024

		Six months ended 30 June 2024 unaudited			Six months ended 30 June 2023 unaudited			Year ended 31 December 2023 audited
	Notes	Revenue  £’000	Capital  £’000	Total  £’000	Revenue  £’000	Capital  £’000	Total  £’000	Revenue  £’000	Capital  £’000	Total  £’000
Gains on investments		–	76,095	76,095	–	94,641	94,641	–	165,905	165,905
Gains on derivative instruments		–	21,012	21,012	–	36,841	36,841	–	50,441	50,441
Income	4	41,081	–	41,081	35,816	–	35,816	47,221	–	47,221
Investment management fees	5	(1,437)	(4,311)	(5,748)	(1,303)	(3,910)	(5,213)	(2,625)	(7,877)	(10,502)
Other expenses		(521)	–	(521)	(507)	–	(507)	(967)	–	(967)
Foreign exchange losses		–	(1,577)	(1,577)	–	(2,599)	(2,599)	–	(1,464)	(1,464)
		---------------	---------------	---------------	---------------	---------------	---------------	---------------	---------------	---------------
Net return on ordinary activities before finance costs and taxation		39,123	91,219	130,342	34,006	124,973	158,979	43,629	207,005	250,634
Finance costs	6	(1,488)	(4,463)	(5,951)	(908)	(2,724)	(3,632)	(2,138)	(6,414)	(8,552)
		---------------	---------------	---------------	---------------	---------------	---------------	---------------	---------------	---------------
Net return on ordinary activities before taxation		37,635	86,756	124,391	33,098	122,249	155,347	41,491	200,591	242,082
Taxation on return on ordinary activities	7	(3,391)	–	(3,391)	(2,916)	–	(2,916)	(3,390)	–	(3,390)
		---------------	---------------	---------------	---------------	---------------	---------------	---------------	---------------	---------------
Net return on ordinary activities after taxation for the period		34,244	86,756	121,000	30,182	122,249	152,431	38,101	200,591	238,692
Return per ordinary share	8	8.38p	21.22p	29.60p	7.38p	29.91p	37.29p	9.32p	49.08p	58.40p
		=========	=========	=========	=========	=========	=========	=========	=========	=========

The Company does not have any other comprehensive income. Accordingly, the net return on ordinary activities after taxation for the period is also the total comprehensive income for the period and no separate Statement of Comprehensive Income has been presented.

The total column of this statement represents the Income Statement of the Company. The revenue and capital columns are supplementary and presented for information purposes as recommended by the Statement of Recommended Practice issued by the AIC.

No operations were acquired or discontinued in the period and all items in the above statement derive from continuing operations.

Statement of Changes in Equity for the six months ended 30 June 2024

	Notes	Share  capital  £’000	Share  premium  account  £’000	Capital  redemption  reserve  £’000	Capital  reserve  £’000	Revenue  reserve  £’000	Total  shareholder’  fund  £’000
Six months ended 30 June 2024 (unaudited)
Total shareholders’ funds at 31 December 2023		10,411	58,615	5,414	1,472,587	40,452	1,587,479
Net return on ordinary activities after taxation for the period		–	–	–	86,756	34,244	121,000
Dividend paid to shareholders	9	–	–	–	–	(20,396)	(20,396)
		---------------	---------------	---------------	---------------	---------------	---------------
Total shareholders’ funds at 30 June 2024		10,411	58,615	5,414	1,559,343	54,300	1,688,083
		=========	=========	=========	=========	=========	=========
Six months ended 30 June 2023 (unaudited)
Total shareholders’ funds at 31 December 2022		10,411	58,615	5,414	1,271,996	34,559	1,380,995
Net return on ordinary activities after taxation for the period		–	–	–	122,249	30,182	152,431
Dividend paid to shareholders	9	–	–	–	–	(18,883)	(18,883)
		---------------	---------------	---------------	---------------	---------------	---------------
Total shareholders’ funds at 30 June 2023		10,411	58,615	5,414	1,394,245	45,858	1,514,543
		=========	=========	=========	=========	=========	=========
Year ended 31 December 2023 (audited)
Total shareholders’ funds at 31 December 2022		10,411	58,615	5,414	1,271,996	34,559	1,380,995
Net return on ordinary activities after taxation for the year		–	–	–	200,591	38,101	238,692
Dividends paid to shareholders	9	–	–	–	–	(32,208)	(32,208)
	---------------	---------------	---------------	---------------	---------------	---------------	---------------
Total shareholders’ funds at 31 December 2023		10,411	58,615	5,414	1,472,587	40,452	1,587,479
	=========	=========	=========	=========	=========	=========	=========

Balance Sheet as at 30 June 2024
Company Number 2638812

	Notes	30 June  2024  unaudited  £’000	31 December  2023  audited  £’000	30 June  2023  unaudited  £’000
Fixed assets
Investments	10	1,626,177	1,518,875	1,459,305
		---------------	---------------	---------------
Current assets
Derivative instruments	10	5,348	886	3,919
Debtors		13,404	11,449	12,141
Amounts held at futures clearing houses and brokers		4,545	8,384	5,869
Cash and cash equivalents		42,633	52,804	36,362
		---------------	---------------	---------------
		65,930	73,523	58,291
		=========	=========	=========
Current liabilities
Derivative instruments	10	(2,615)	(3,521)	(1,681)
Other creditors		(1,409)	(1,398)	(1,372)
		---------------	---------------	---------------
		(4,024)	(4,919)	(3,053)
		=========	=========	=========
Net current assets		61,906	68,604	55,238
		=========	=========	=========
Net assets		1,688,083	1,587,479	1,514,543
		=========	=========	=========
Capital and reserves
Share capital	11	10,411	10,411	10,411
Share premium account		58,615	58,615	58,615
Capital redemption reserve		5,414	5,414	5,414
Capital reserve		1,559,343	1,472,587	1,394,245
Revenue reserve		54,300	40,452	45,858
		---------------	---------------	---------------
Total shareholders’ funds		1,688,083	1,587,479	1,514,543
		=========	=========	=========
Net asset value per ordinary share	12	413.01p	388.39p	370.55p
		=========	=========	=========

Notes to the Financial Statements

1 Principal Activity
Fidelity European Trust PLC is an Investment Company incorporated in England and Wales with a premium listing 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 Publication of Non-statutory Accounts
The Financial Statements in this Half-Yearly Report have not been audited by the Company's Independent Auditor and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006 ("the Act"). The financial information for the year ended 31 December 2023 is extracted from the latest published Financial Statements of the Company. Those Financial Statements were delivered to the Registrar of Companies and included the Independent Auditor's Report which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Act.

3 ACCOUNTING POLICIES
(i) Basis of Preparation
The Company prepares its Financial Statements on a going concern basis and in accordance with UK Generally Accepted Accounting Practice ("UK GAAP") and FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland, issued by the Financial Reporting Council. The Financial Statements are also 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. FRS 104: Interim Financial Reporting has also been applied in preparing this condensed set of Financial Statements. The accounting policies followed are consistent with those disclosed in the Company's Annual Report and Financial Statements for the year ended 31 December 2023.

(ii) Going Concern
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least twelve months from the date of approval of these Financial Statements. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these Financial Statements. This conclusion also takes into account the Board’s assessment of the risks faced by the Company as detailed in the Interim Management Report above.

4 Income

	Six months  ended  30.06.24  unaudited  £’000	Six months  ended  30.06.23  unaudited  £’000	Year  ended  31.12.23  audited  £’000
Investment income
Overseas dividends	33,375	28,415	37,484
Overseas scrip dividends	–	957	957
UK dividends	957	965	1,679
	---------------	---------------	---------------
	34,332	30,337	40,120
	=========	=========	=========
Derivative income
Income recognised from futures contracts	1,659	1,797	2,392
Dividends received on long CFDs	3,536	3,339	3,570
Interest received on CFDs	180	61	333
	---------------	---------------	---------------
	5,375	5,197	6,295
	=========	=========	=========
Investment and derivative income	39,707	35,534	46,415
	=========	=========	=========
Other interest
Interest received on collateral, bank deposits and money market funds	1,342	276	798
Interest received on tax reclaims	32	6	8
	---------------	---------------	---------------
	1,374	282	806
	=========	=========	=========
Total income	41,081	35,816	47,221
	=========	=========	=========

Special dividends of £nil have been recognised in capital during the period (six months ended 30 June 2023 and year ended 31 December 2023: £710,000).

5 Investment Management Fees

	Revenue  £’000	Capital  £’000	Total  £’000
Six months ended 30 June 2024 (unaudited)
Investment management fees	1,437	4,311	5,748
	---------------	---------------	---------------
Six months ended 30 June 2023 (unaudited)
Investment management fees	1,303	3,910	5,213
	---------------	---------------	---------------
Year ended 31 December 2023 (audited)
Investment management fees	2,625	7,877	10,502
	=========	=========	=========

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.

FII charges investment management fees at an annual rate of 0.85% of net assets up to £400 million and 0.65% of net assets in excess of £400 million. Fees are payable monthly in arrears and are calculated on a daily basis.

Investment management fees have been allocated 75% to capital reserve in accordance with the Company‘s accounting policies.

6 Finance Costs

	Revenue  £’000	Capital  £’000	Total  £’000
Six months ended 30 June 2024 (unaudited)
Interest paid on bank deposits	7	22	29
Interest paid on CFDs1	1,145	3,435	4,580
Costs recognised from futures contracts	336	1,006	1,342
	---------------	---------------	---------------
	1,488	4,463	5,951
	=========	=========	=========
Six months ended 30 June 2023 (unaudited)
Interest paid on CFDs1	647	1,942	2,589
Costs recognised from futures contracts	261	782	1,043
	---------------	---------------	---------------
	908	2,724	3,632
	=========	=========	=========
Year ended 31 December 2023 (audited)
Interest paid on CFDs1	1,601	4,803	6,404
Costs recognised from futures contracts	537	1,611	2,148
	---------------	---------------	---------------
	2,138	6,414	8,552
	=========	=========	=========

1 The interest paid on CFDs is higher in the current reporting period due to an increase of long CFDs exposures and interest rates. As a result, the Company has been exposed to higher interest charges.

Finance costs have been allocated 75% to capital reserve in accordance with the Company’s accounting policies.

7 Taxation on Return on Ordinary Activities

	Six months  ended  30.06.24  unaudited  £’000	Six months  ended  30.06.23  unaudited  £’000	Year  ended  31.12.23  audited  £’000
Overseas taxation	3,391	2,916	3,390
	---------------	---------------	---------------

8 Return per Ordinary Share

	Six months  ended  30.06.24  unaudited	Six months  ended  30.06.23  unaudited	Year  ended  31.12.23  audited
Revenue return per ordinary share	8.38p	7.38p	9.32p
Capital return per ordinary share	21.22p	29.91p	49.08p
	---------------	---------------	---------------
Total return per ordinary share	29.60p	37.29p	58.40p
	=========	=========	=========

The return per ordinary share is based on the net return on ordinary activities after taxation for the period divided by the weighted average number of ordinary shares held outside Treasury during the period, as shown below:

	£’000	£’000	£’000
Net revenue return on ordinary activities after taxation	34,244	30,182	38,101
Net revenue return on ordinary activities after taxation	86,756	122,249	200,591
	---------------	---------------	---------------
Net total return on ordinary activities after taxation	121,000	152,431	238,692
	=========	=========	=========

	Number	Number	Number
Weighted average number of ordinary shares held outside Treasury during the period	408,730,523	408,730,523	408,730,523
	=========	=========	=========

9 Dividends Paid to Shareholders

	Six months  ended  30.06.24  unaudited  £’000	Six months  ended  30.06.23  unaudited  £’000	Year  ended  31.12.23  audited  £’000
Final dividend of 4.99 pence per ordinary share paid for the year ended 31 December 2023	20,396	–	–
Interim dividend of 3.26 pence per ordinary share paid for the year ended 31 December 2023	–	–	13,325
Final dividend of 4.62 pence per ordinary share paid for the year ended 31 December 2022	–	18,883	18,883
	---------------	---------------	---------------
	20,396	18,883	32,208
	=========	=========	=========

The Company has declared an interim dividend for the six month period to 30 June 2024 of 3.60 pence per ordinary share (2023: 3.26 pence). The interim dividend will be paid on 25 October 2024 to shareholders on the register at close of business on 20 September 2024 (ex-dividend date 19 September 2024). The total cost of this interim dividend, which has not been included as a liability in these Financial Statements, is £14,714,000 (2023: £13,325,000). This amount is based on the number of ordinary shares held outside Treasury at the date of this report.

10 Fair Value Hierarchy
The Company is required to disclose the fair value hierarchy that classifies its financial instruments measured at fair value at one of three levels, according to the relative reliability of the inputs used to estimate the fair values.

Classification	Input
Level 1	Valued using quoted prices in active markets for identical assets.
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 table below sets out the Company’s fair value hierarchy:

30 June 2024 (unaudited)	Level 1  £’000	Level 2  £’000	Level 3  £’000	Total  £’000
Financial assets at fair value through profit or loss
Investments	1,626,177	–	–	1,626,177
Derivative instrument assets	531	4,817	–	5,348
	---------------	---------------	---------------	---------------
	1,626,708	4,817	–	1,631,525
	=========	=========	=========	=========
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities	–	(2,615)	–	(2,615)
	=========	=========	=========	=========

31 December 2023 (audited)	Level 1  £’000	Level 2  £’000	Level 3  £’000	Total  £’000
Financial assets at fair value through profit or loss
Investments	1,518,875	–	–	1,518,875
Derivative instrument assets	–	886	–	886
	---------------	---------------	---------------	---------------
	1,518,875	886	–	1,519,761
	=========	=========	=========	=========
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities	(348)	(3,173)	–	(3,521)
	=========	=========	=========	=========

30 June 2023 (unaudited)	Level 1  £’000	Level 2  £’000	Level 3  £’000	Total  £’000
Financial assets at fair value through profit or loss
Investments	1,459,305	–	–	1,459,305
Derivative instrument assets	1,120	2,799	–	3,919
	---------------	---------------	---------------	---------------
	1,460,425	2,799	–	1,463,224
	=========	=========	=========	=========
Financial liabilities at fair value through profit or loss
Derivative instrument liabilities	–	(1,681)	–	(1,681)
	=========	=========	=========	=========

11 Share Capital

	30 June 2024 unaudited		31 December 2023 audited		30 June 2023 unaudited
	Number of  shares	£’000	Number of  shares	£’000	Number of  shares	£’000
Issued, allotted and fully paid
Ordinary shares of 2.5 pence each held outside of Treasury
Beginning of the period	408,730,523	10,218	408,730,523	10,218	408,730,523	10,218
Ordinary shares repurchased into Treasury	–	–	–	–	–	–
	---------------	---------------	---------------	---------------	---------------	---------------
End of the period	408,730,523	10,218	408,730,523	10,218	408,730,523	10,218
	=========	=========	=========	=========	=========	=========
Ordinary shares of 2.5 pence each held in Treasury1
Beginning of the period	7,717,387	193	7,717,387	193	7,717,387	193
Ordinary shares repurchased into Treasury	–	–	–	–	–	–
	---------------	---------------	---------------	---------------	---------------	---------------
End of the period	7,717,387	193	7,717,387	193	7,717,387	193
	=========	=========	=========	=========	=========	=========
Total share capital		10,411		10,411		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.

During the period, no ordinary shares were repurchased into Treasury (year ended 31 December 2023 and six months ended 30 June 2023: nil shares).

12 Net Asset Value per Ordinary Share
The calculation of the net asset value per ordinary share is based on the total Shareholders’ funds divided by the number of ordinary shares held outside of Treasury.

	30.06.24  unaudited	31.12.23  audited	30.06.23  unaudited
Total shareholders’ funds	£1,688,083,000	£1,587,479,000	£1,514,543,000
Ordinary shares held outside of Treasury at the period end	408,730,523	408,730,523	408,730,523
Net asset value per ordinary share	413.01p	388.39p	370.55p
	=========	=========	=========

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.

13 Capital Resources and Gearing
The Company does not have any externally imposed capital requirements. The financial resources of the Company comprise its share capital and reserves, as disclosed in the Balance Sheet above, and any gearing, which is managed by the use of derivative instruments. Financial resources are managed in accordance with the Company’s investment policy and in pursuit of its investment objective.

The Company’s gross gearing and net gearing at the end of the period is shown below:

	Gross gearing Asset exposure		Net gearing Asset exposure
	£’000	%1	£’000	%1
30 June 2024 (unaudited)
Investments	1,626,177	96.3	1,626,177	96.3
Long CFDs	179,614	10.7	179,614	10.7
Long futures	69,923	4.1	69,923	4.1
	---------------	---------------	---------------	---------------
Total long exposures	1,875,714	111.1	1,875,714	111.1
	=========	=========	=========	=========
Short CFDs	12,990	0.8	(12,990)	(0.8)
	=========	=========	=========	=========
Gross asset exposure/net market exposure	1,888,704	111.9	1,862,724	110.3
Shareholders’ funds	1,688,083		1,688,083
	=========	=========	=========	=========
Gearing2		11.9		10.3
		=========		=========
31 December 2023 (audited)
Investments	1,518,875	95.6	1,518,875	95.6
Long CFDs	199,945	12.6	199,945	12.6
Long futures	64,492	4.1	64,492	4.1
	---------------	---------------	---------------	---------------
Total long exposures	1,783,312	112.3	1,783,312	112.3
	=========	=========	=========	=========
Short CFDs	12,736	0.8	(12,736)	(0.8)
	---------------	---------------	---------------	---------------
Gross asset exposure/net market  exposure	1,796,048	113.1	1,770,576	111.5
Shareholders’ funds	1,587,479		1,587,479
	=========		=========
Gearing2		13.1		11.5
		=========		=========

1 Asset exposure to the market expressed as a percentage of shareholders’ funds.

2 Gearing is the amount by which the gross asset exposure/net market exposure exceeds shareholders' funds expressed as a percentage of shareholders’ funds.

	Gross gearing Asset exposure		Net gearing Asset exposure
30 June 2023 (unaudited)	£’000	%1	£’000	%1
Investments	1,459,305	96.4	1,459,305	96.4
Long CFDs	177,871	11.7	177,871	11.7
Long futures	60,659	4.0	60,659	4.0
	---------------	---------------	---------------	---------------
Total long exposures	1,697,835	112.1	1,697,835	112.1
	=========	=========	=========	=========
Short CFDs	18,101	1.2	(18,101)	(1.2)
Gross asset exposure/net market exposure	1,715,936	113.3	1,679,734	110.9
Shareholders’ funds	1,514,543		1,514,543
	=========	=========	=========	=========
Gearing2		13.3		10.9
		=========		=========

1 Asset exposure to the market expressed as a percentage of shareholders’ funds.

2 Gearing is the amount by which the gross asset exposure/net market exposure exceeds shareholders’ funds expressed as a percentage of shareholders’ funds.

14 Transactions with the Manager and Related Parties
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”), the Investment Manager. Both companies are Fidelity group companies. Details of the fee arrangements are given in Note 5 above.

During the period, fees for portfolio management services of £5,748,000 (six months ended 30 June 2023: £5,213,000 and year ended 31 December 2023: £10,502,000) were payable to FII. At the Balance Sheet date, fees for portfolio management services of £970,000 (31 December 2023: £925,000 and 30 June 2023: £866,000) were accrued and included in other creditors. FII also provides the Company with marketing services. The total amount payable for these services during the period was £116,000 (six months ended 30 June 2023: £160,000 and year ended 31 December 2023: £260,000). At the Balance Sheet date, marketing services of £55,000 were accrued and included in other creditors (31 December 2023: £14,000 and 30 June 2023: £nil).

As at 30 June 2024, the Board consisted of five non-executive Directors (shown in the Directory in the Half-Yearly Report), all of whom are considered to be independent by the Board. None of the Directors have a service contract with the Company. The Chairman receives an annual fee of £48,000, the Audit Committee Chair an annual fee of £37,250, the Senior Independent Director an annual fee of £33,500 and each other Director an annual fee of £31,000. The following members of the Board hold ordinary shares in the Company: Vivian Bazalgette 30,000 shares, Fleur Meijs 28,970 shares, Milyae Park 10,000 shares, Sir Ivan Rogers 4,569 shares and Paul Yates 32,000 shares.

The financial information contained in this Half-Yearly Results Announcement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the six months ended 30 June 2024 and 30 June 2023 has not been audited or reviewed by the Company’s Independent Auditor.

The information for the year ended 31 December 2023 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies, unless otherwise stated. The report of the Auditor on those financial statements contained no qualification or statement under sections 498(2) or (3) of the Companies Act 2006.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

A copy of the Half-Yearly Report will shortly be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM

The Half-Yearly Report will also be available on the Company's website at www.fidelity.co.uk/europe where up to date information on the Company, including daily NAV and share prices, factsheets and other information can also be found.

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