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Liontrust GF European Smaller Companies Fund

January 2021 review
Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.

The Fund’s A5 share class returned -3.7%* in euro terms in January. This Fund’s target benchmark, the MSCI Europe Small Cap Index, returned 0.4%.


January saw investors attempting to digest newsflow around the pace at which Covid-19 vaccines could be approved and distributed in various regions, as well as analysing the ongoing spread of the virus. With new variants causing higher transmission rates, lockdown measures continued to be introduced globally.


The pace of vaccination varied greatly: Israel had administered a dose to over 50% of its population by the end of the month and the UK had achieved 14%, but European countries such as Germany (3%) and France (2%) saw a slower roll-out.


The inauguration of US President Biden ensured that it was also an eventful month away from pandemic developments. The transfer of power was marred by mobs who stormed the US Capitol building, leading to Trump being banned by Twitter and impeached for a second time, charged with “incitement to insurrection”. As Biden took office, he set about gaining support for his proposed US$1.9tn stimulus plan, a task made easier earlier in the month after the Democrats won two key run-off races in Georgia to gain control of the US Senate.


In European markets, the year-end rally extended into the first half of January before markets lost ground to finish the month slightly lower in euro terms. IT (+2.3%), energy (+2.0%) and materials (+1.0) recorded gains. Real estate (-4.4%), financials (-2.8%), consumer staples (-2.8%) were the worst performers.


Impax Asset Management (+16%) was one of the strongest stocks in the portfolio for a second month in a row. Following on from December’s release of full-year results for the 12 months to end September, in January it released an update covering the first quarter of its new fiscal year. Over the three months, assets under management rose 25% to £25bn. The growth comprised both net inflows and positive investment performance.


ATOSS Software (+18%) achieved 21% sales growth to 86m in 2020 while operating profits rose 36% to 26m. Sales for the specialist in workforce management software were boosted by 66% growth in recurring revenue streams from cloud solutions and subscription. In the context of its 2020 growth, its guidance of at least 10% sales growth to 95m in 2021 seemed conservative. However, investors look to have focused on its description of “unabated” demand and an “enormous need” for many companies to catch up on digitalisation; consensus analyst sales forecasts for 2021 have edged up to 99m.


Within a weak consumer discretionary (-2.1%) sector, Danish jeweller Pandora (-14%) suffered a fall. Its shares had performed well in December after it announced that organic growth would exceed its guidance range of -14% to -17% by at least 1 percentage point. In January it updated guidance to a -11% organic sales change in 2020. It also stated that operating margins should be about 20%, higher than the December guidance of around 19%. However, it seemed that investors had anticipated improving trading momentum from the company and – with the shares having performed very strongly since March 2020 – looked to take some profits.


Brewer Royal Unibrew (-15%) also lost some ground, perhaps suggesting some nervousness over the sales impact of the latest lockdown measures as pubs and restaurants close.


Positive contributors to performance included:

Atoss Software (+18%), Impax Asset Management (+16%) and Keller Group (+9.9%).


Negative contributors to performance included:

Royal Unibrew (-14%), Pandora (-13%) and Simcorp (-12%).


Discrete years' performance** (%), to previous quarter-end:






Liontrust GF European Smaller Companies A5 Acc EUR




MSCI Europe Small Cap Index





*Source: Financial Express, as at 31.01.21, total return (net of fees and income reinvested). Non fund-related return data sourced from Bloomberg.


**Source: Financial Express, as at 31.12.20, total return (net of fees and income reinvested). Discrete data is not available for five full 12 month periods due to the launch date of the portfolio. Investment decisions should not be based on short-term performance.

Understand common financial words and terms See our glossary

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. Investment in Funds managed by the Cashflow Solution team involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The Liontrust European Growth Fund holds a concentrated portfolio of stocks, if the price of one of these stocks should move significantly, this may have a notable effect on the value of the respective portfolio. The Liontrust Global Income Fund's expenses are charged to capital. This has the effect of increasing dividends while constraining capital appreciation. 


The information and opinions provided should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Always research your own investments and (if you are not a professional or a financial adviser) consult suitability with a regulated financial adviser before investing.

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