In this week’s Q&A podcast from FundCalibre, Marcel Stotzel shares how his team manages the Fidelity European Trust with a focus on quality, downside protection and sustainable dividend growth and how investors can navigate volatility, without compromising potential.
The team cover the recent merger with the Henderson European Trust, the benefits of scale and liquidity and how high-quality companies are navigated amid market rotations and higher rates.
Marcel also discusses the evolving European investment landscape, domestic opportunities and why they have selective exposure to AI.
Why you should listen to the interview: Marcel breaks down sustainable dividend strategies and sector management for a risk-averse portfolio. Whether navigating market rotations, evaluating domestic Europe, or selectively approaching AI, listeners will leave with practical perspectives on building resilient, long-term portfolios.
This interview was recorded on 29 January 2026. Please note, answers are edited and condensed for clarity. To gain a fuller understanding and clearer context, please listen to the full interview.
Interview highlights:
Why quality investing
“What we are really trying to do underneath it all is we are trying to deliver 1% to 2% performance post fees per annum relative to the benchmark over a relatively consistent timeframe. We’ll have good years and bad years like everybody else, but over three to five years, that’s our goal.
“And within that, downside protection is something that’s quite important for us. The last thing we ever want is to be saying the market is down 10%, we down 20%. That preservation of capital, is really vital for us.
“And what we do in practice with all of those kind of philosophies is we try to look for companies that consistently grow their dividends year in, year out. And the simple reason that we do that is because we’ve sliced and diced the data a million which ways and companies that consistently grow their dividends tend to outperform the market. And if you look at Europe over the past 1, 3, 5 years, that’s been the case. And if you went back further, that would be the case too.
“So companies that consistently grow their dividends outperform. And a big part of being able to consistently grow your dividend is to have quality characteristics. So we don’t love quality for quality’s sake. For us, the quality enables us to have that conviction that the company’s going to be able to grow its dividends for the next five years.”
Benefits to investors post Henderson European Trust merger
“Firstly and probably the one that most investors will notice firstly, is because of the biggest scale, we brought on £400 million of extra assets as part of the deal, we’ve lowered up fees on the trust, so that’s going to flow straight into the pockets of existing shareholders.
“We’ve also done a fee waiver for new shareholders coming on as part of Henderson. So directly allowing our shareholders to benefit almost one to one, if not more than one to one from that bigger scale.
“And that bigger scale also breeds better liquidity, with the biggest European Trust in the market. And that means, easier to trade out of lower transaction fees, et cetera.
“And then lastly, we also brought on two directors from Henderson who have been great additions to the team. And you know, Vicki’s a former fund manager, and will basically just help us to further even strengthen what was already a very strong board.”
Not owning everything
“We make sure that we have plus or minus 5% weightings to each of the big sectors versus our benchmark. And just that discipline, for example having energy when the Russians invaded Ukraine, meant that we didn’t get carried out on a stretcher.
“We don’t need to have all of the sub-sectors. So for example, consumer discretionary subset is autos. We don’t need to have autos, which we don’t. But just having something in those big buckets definitely does help.”
Conflicted on AI
“I am very much of the view that I can see both sides of the coin. I can see a world class tech, world changing should I say, new technology here that could be on par with the internet in terms of the kind of impact that it has on society. But on the other hand, I can see a massive capital cycle building at some point.
“There are some kind of booms that just keep on booming, smartphones being one of them. That’s off the top of my head.
“There was never a bust in smartphones, cloud computing being another one that just kind of boomed and boomed and boomed without ever slowing, without ever having a burst. But obviously, you know, the majority of booms do end up having at least a mini-burst at some point in time because you build up too much capital.
“So, trading off the two of them for us means that we do have more or less an inline position in the market to overall AI exposure, but we want to do it in a very selective and surgical way such that we are not in the kind of frothier more expensive parts.
“It’s interesting. I mean, ASML when we were making it a big position six to 12 months ago, it was left in the woods, right? People thought of it as an AI loser. And as a result, we’ve been trimming ASML kind of as it’s done better and better and better.
“But there are other names too. So we do think there are parts of the market where you can still find AI value. Even though we wouldn’t want to be going all in on those parts of the markets, given we are still somewhat conflicted here.”
Conclusion: By combining a risk-aware philosophy with deep research and selective exposure to emerging trends like AI, investors can navigate volatility without compromising potential. Marcel emphasises the balance between conviction and discipline demonstrating that you can both protect capital and uncover growth opportunities.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The writer’s views are their own and do not constitute financial advice.
This information should not be relied upon by retail clients or investment professionals. Reference to any particular investment does not constitute a recommendation to buy or sell the investment.
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