European Opportunities Trust PLC
European Opportunities Trust PLC (JEO.LN) is a member of the FTSE 250.
The following interactive data is supplied by Morningstar. Portfolio holdings are shown as at 31 May (prior to the sale of all shares in Wirecard AG on 18 June) and will be updated as at 30 June. The full portfolio as at 22 June is available under the literature section beneath.
Objective of the Company
The objective of the Company is to invest in securities of European companies and in sectors or geographical areas which are considered by the Investment Adviser to offer good prospects for capital growth, taking into account economic trends and business development.
The Company will, at all times, invest and manage its assets, with the objective of spreading risk and in accordance with the following policies:
Notwithstanding the broad powers of investment available to the Company as a closed-ended fund, the Board has adopted the following investment restrictions:
- no single holding shall constitute more than 10% of the Company’s total assets (calculated at the time of investment);
- the Company will not invest in unlisted securities;
- the Company will not invest in derivative instruments, whether for efficient portfolio management, gearing or investment purposes;
- the Company will not invest in other listed closed-ended investment funds.
- the Company shall not take legal or management control over any investments in its portfolio; and
- not more than 50% of the Company’s investments may be in securities which are not qualifying securities or government securities for the purposes of the UK ISA Regulations.
The Directors consider that long-term capital growth can be enhanced by the use of gearing through bank borrowings. The Directors consider that the Company’s level of gearing should be maintained at appropriate levels, with sufficient flexibility to enable the Company to adapt at short notice to changes in market conditions.
The Board oversees the level of gearing in the Company and reviews the position with the Investment Adviser on a regular basis. In normal circumstances the Board does not expect the level of gearing to exceed 20% of the Company’s total assets (calculated at the time of borrowing).
The Investment Adviser adopts a stock picking approach in the belief that a thorough analysis and understanding of a company is the best way to identify long-term superior growth prospects. This understanding begins with identifying those companies where the ownership structure and incumbent management are conducive to the realisation of the aim of achieving superior long-term earnings growth.
The Investment Adviser will seek to identify companies which enjoy certain key business characteristics including some or all of the following:
- a strong management record and team, and the confidence that the Investment Adviser has in that management’s ability to explain and account for its actions;
- proprietary technology and other factors which indicate a sustainable competitive advantage;
- a reasonable expectation that demand for their products or services will enjoy long-term growth; and
- an understanding that structural changes are likely to benefit rather than negatively impact that company’s prospects.
In analysing potential investments, the Investment Adviser will employ differing valuation techniques depending on their relevance to the business characteristics of a particular company. However, the underlying feature will be the sustainability and growth of free cashflow in the long-term.
Portfolio risk is mitigated by investment in a diversified spread of investments. The Investment Adviser is not constrained by benchmark weightings, sector, geographical location within Europe or market capitalisation or size of investee companies.
Any material change in the investment policy of the Company described above may only be made with the approval of shareholders by an ordinary resolution.
- Primary benchmark index: MSCI Europe Total Return Index in GBP (MXEU)
- Secondary benchmark index: MSCI Europe ex-UK Total Return Index in GBP (MXEUG)
Dividend Reinvestment Plan
Shareholders may elect for the company’s registrar, Link Asset Services, to reinvest dividends automatically on their behalf.
Dividend Reinvestment Plan Terms and Conditions are available upon request via the Link Shareholder Helpline on 0371 664 0381* (Overseas +44 (0) 371 664 0381*), by email to email@example.com or through www.signalshares.com**.
*Calls to this number are charged at the standard geographical rate and will vary by provider. Calls outside of the United Kingdom will be charged at the applicable international rate. Lines are open from 09.00 – 17.30 Monday to Friday. 3rd party calls may be recorded.
**Signal shares also allows you to manage your shareholding online. If you are a direct investor you can view your shareholding, change the way the registrar communicates with you or the way you receive your dividends, and buy and sell shares. If you haven’t used this service before, all you need to do is enter the name of the company and register your account. You’ll need your Investor code (IVC) printed on your share certificate in order to register.
Invest through a financial adviser, stockbroker or bank
We recommend that you discuss any financial decisions with a financial adviser, particularly if you are unsure whether an investment is suitable, as Devon is unable to provide investment advice. A financial adviser can provide advice on and facilitate investment into the company. Consider using unbiased.co.uk or thefps.org to find a financial adviser near to you.
Invest through an execution-only platform
An investment in an investment trust can also be executed through an execution-only platform. A transaction charge and other charges are payable to the platform for the provision of this service. A selection of platforms are shown below:
Non-mainstream pooled investment products
The Company currently conducts its affairs, and intends to continue to conduct its affairs, so that the Company’s ordinary shares can be recommended by Independent Financial Advisers to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream pooled investment products (NMPI).The Company’s ordinary shares are excluded from the FCA’s restrictions which apply to non-mainstream pooled investment products because they are shares in an investment trust.
When making an investment in an investment trust you are buying shares in a company that is listed on a stock exchange. The price of the shares will be determined by supply and demand. Consequently, the share price of an investment trust may be higher or lower than the underlying net asset value of the investments in its portfolio and there can be no certainty that there will be liquidity in the shares.
Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested.
European Opportunities Trust PLC can borrow money and use it to invest, also known as ‘gearing’ or ‘leveraging’. The risk with gearing is that when the borrowed money has to be repaid the value of the Trust’s investments may not be enough to repay it and any interest and the Trust will make a loss. If the value of the Trust’s investments falls, any invested borrowings will increase the value of this loss. Investors may get back nothing at all if the fall in value is sufficiently large. The company invests in a small number of holdings and as such carries more risk than companies which invest across a larger number of holdings. The company invests mainly in shares and it is likely to experience fluctuations in price which are larger than companies that invest only in bonds and/or cash.
Before making an investment decision, please read the PRIIPS Key Information Document which is available from Devon on request. Past performance is no guide to the future. Company examples are for illustrative purposes only and are not a recommendation to buy or sell.