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Liontrust GF European Strategic Equity Fund

March 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 A4 share class returned 7.1%* in euro terms in March. The Fund’s comparator benchmarks, the MSCI Europe Index and HFRX Equity Hedge EUR Index, returned 6.5% and 0.8% respectively.


Investors continued to anticipate economic acceleration as the global vaccine roll-out was extended despite concerns over the AstraZeneca/Oxford vaccine’s links to rare blood clots. In addition, President Biden’s US$1.9 trillion stimulus plan was passed through Congress and is likely to add further fuel to the economic expansion.


In February, this stimulus injection stoked inflation concerns and sparked a sell-off in the sovereign bond market. In March, both US Treasury Secretary Janet Yellen and US Federal Reserve Chair Jerome Powell issued statements indicating that they had no concerns about the US economy overheating. Powell said that higher prices this year are likely to be transitory, while the market has been orderly in adjusting to a brighter economic outlook. Yellen added that inflation risks remain subdued despite the stimulus, but the plan could help the US reach full employment in 2022.


In this environment, value stocks continued to outperform: the MSCI Europe Value Index rose 7.4% in euro terms compared to the MSCI Europe Growth Index’s 5.4% return. All sectors in the MSCI Europe ended higher with consumer staples the biggest riser (+9.4%) followed by communication services (+9.0%) and industrials (+7.9%), while energy (+1.9%) was by far the biggest laggard.


The Fund’s long book once again benefitted from its value bias and outperformed the market. Although detracting slightly from overall performance, the short book had a very solid month given the market backdrop. At the end of March, the Fund’s net exposure was 79%.


London-listed housebuilder Vistry Group (+35%) was the long book’s biggest gainer. It said a strong second half performance helped 2020 adjusted pre-tax profit exceed its expectations. Greater demand in the second half saw the group’s private sales rate per outlet per week increase 15%, while pricing saw a marginal increase during the 12 months. Trading in early 2021 had continued in the same vein and was running ahead of the robust start it made to 2020. The company guided 2021 pre-tax profit to be more than double the previous year’s figure.


The impact from the Covid-19 pandemic was more visible in Bank of Ireland’s (+25%) 2020 results as the company swung to an underlying pre-tax loss of €374m. The bank recorded a €1.1bn net credit impairment charge, a sharp rise compared to the €215m charge it booked in 2019, mostly related to its non-performing loans. However, this impairment was at the lower end of company guidance and Bank of Ireland said that – notwithstanding any further deterioration – the majority of the risk from Covid-19 is now captured and impairments in 2021 should be materially lower.


Danish jeweller Pandora (+13%) said organic growth and total sell-out growth were 12% and 7% respectively in February as it continued to reopen stores. A quarter of its stores remained closed at month end, but Pandora said it is pleased with the performance so far in 2021. It maintained its guidance for organic growth of over 8% and EBIT (earnings before interest and taxes) margin of over 21%.


Container shipping company AP Moller-Maersk (+14%) saw its shares rise after the resolution of the blockage in the Suez Canal. Ever Given, one of the world’s largest container ships, became wedged across the canal, causing a major disruption to global trade flow. The canal remained blocked for almost a week before rescue efforts finally dislodged the ship.


Shares in German fertilizer company K+S (-8.3%) fell after it disappointed the market with its 2021 EBITDA guidance of €440m-€540m. This forecast does, however, represent a significant increase from the 2020 level of €267m as K+S highlighted very good demand for potash fertilizers and a further recovery in prices. In 2020, the group reported a €1.8bn adjusted loss, mainly attributable to a €1.9bn impairment loss on assets in its European operating unit. As a result, K+S did not declare a dividend.


Sportswear and equipment maker Adidas’s (-8.3%) shares fell despite trading seeing a strong finish to 2020. Fourth quarter direct-to-consumer sales rose 14%, driven by a strong performance in Greater China, North America and Europe, while e-commerce sales increased 43%. However, overall sales were up only 1% at constant currencies and down 5% in euro terms during the quarter. In its outlook statement, Adidas highlighted the €250m one-off profit hit as it prepares to spin off its Reebok brand into a separate company.


Moncler’s (-4.7%) chairman and CEO Remo Ruffini sold some shares in March. This followed the announcement of the Stone Island acquisition and an earlier announcement in which Ruffini and various other shareholders agreed in aggregate to hold no more than 25% of the issued share capital of the company following the acquisition. 


Within the short book, one of the contributors was a Danish clean energy company which reported a net loss for 2020 after what it said was a very challenging year due to Covid-19 restrictions. A detractor from the short book was a biotech company whose shares jumped on the release of positive data for its Covid-19 vaccine candidate.


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







Liontrust GF European Strategic Equity
A4 Acc EUR






MSCI Europe







*Source: Financial Express, as at 31.03.21, total return (income reinvested and net of fees). Non fund-related return data sourced from Bloomberg.


**Source: Financial Express, as at 31.03.21, total return (income reinvested and net of fees).

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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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