Fidelity adds retail share class to Institutional Europe ex-UK Fund

Fidelity International is adding a new retail share class to its successful Institutional Europe ex-UK Fund. The share class, which is branded Europe Long Term Growth, launches on 1 July 2009 and provides investors with access to companies in Europe outside the UK that have attractive valuations, durable business models, clear competitive advantages and the possibility of growing earnings over the longer term.

Fidelity's £573m Institutional Europe ex-UK fund has generated a cumulative return of 37.5% versus a benchmark 22.9% since Mr Fraenkel-Thonet started managing the portfolio on 31 January 1999.

Managed by the London-based Thomas Fraenkel-Thonet, the portfolio is concentrated, typically holding between 40 and 100 stocks. The portfolio manager's approach to long-term investing is based upon an in-depth approach to due diligence and a bottom up approach to portfolio construction.

Mr Fraenkel-Thonet has more than 20 years of investment experience, the last 10 as a Fidelity portfolio manager. He currently manages £1.5bn of retail and institutional European equity funds, including Fidelity Institutional Europe ex-UK Fund and the Luxembourg registered FF European Larger Companies Fund, a first quartile performer over one, three and five years.

This new investment opportunity complements Fidelity's two other onshore retail European equity funds by seeking growth over a longer term horizon, which means stocks may be held for upwards of three years. The £3.2bn FIF European Fund, managed by Tim McCarron, is principally focused on value and the £524m FIF European Opportunities Fund, managed by Colin Stone, seeks growth from smaller to mid-cap companies.

Mr Fraenkel-Thonet comments, "My approach differs from many funds in the sector because I like to hold well-positioned stocks over the longer term - I also avoid the noise and distractions generated by the economic situation and by shorter term earnings data. This means investors have a concentrated portfolio of high conviction holdings, which are attractively valued but which also come from a diversified range of sectors.

"Three of the many companies I currently like, and which illustrate my approach, are Aryzta, Deutsche Boerse and Neopost. The former is a baker from the consumer staples sector which enjoys strong pricing power and supplies a high margin product for convenience stores. Deutsche Boerse has been unfairly tarred with the financials brush but the stock has an excellent competitive advantage, a durable franchise and the ability to quickly launch products that have the potential to provide high incremental earnings. Lastly, Neopost is one of two global franking machine companies - it has strong revenue potential and the opportunity to grow beyond its nearest rival.

"The market is cheap - valuations on European stocks have not been this low in almost 20 years. My belief is that a concentrated and diversified portfolio of companies that have attractive valuations, clear competitive advantages and strong risk policies should provide investors with a reasonable return over the longer term, irrespective of the short-term outlook."

Fidelity's Institutional Europe-ex UK Fund, and therefore the Europe Long-Term Growth retail share class, is a sterling denominated UK-domiciled open ended investment company. Its estimated total expense ratio is 1.72 and the charges are 3.5% (initial) and 1.5% (annual). The minimum initial investment is £1,000 and the minimum top up investment is £250.