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Liontrust GF European Strategic Equity Fund

April 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 3.3%* in euro terms in April. The Fund’s comparator benchmarks, the MSCI Europe Index and HFRX Equity Hedge EUR Index, returned 2.1% and 2.8% respectively.


The drivers of April’s equity market gains were the familiar themes of improving economic outlook due to the robust global vaccine rollout, while governments and central banks maintained accommodative policy. US Federal Reserve Chair Jerome Powell said the central bank is a long way from its economic goals, indicating that any tightening in monetary conditions is still some distance in the future. In addition, President Joe Biden unveiled plans for fresh stimulus worth US$1.8 trillion for American families, which would be funded by tax hikes on the wealthy.


All sectors in the MSCI Europe Index, except for energy (-3.6%), ended April higher in euro terms. The best performers were real estate (+4.9%), IT (+4.6%) and consumer staples (+3.4%).


The long book once again outpaced the MSCI Europe, making a strong contribution to overall performance. As was the case in March, the short book delivered a solid performance against the current market backdrop. Net exposure was managed lower to 55% to reflect the strong market run in the last six months.


Financials were the biggest source of positive attribution for the long book, with Bank of Ireland (+15%) and Capital One Financial (+14%) the highlights. The latter reported first quarter earnings that trumped analyst estimates. The US credit card and auto loans company said diluted net income per share was US$7.03, coming in well ahead of the market forecast of US$4.13. Founder and CEO Richard Fairbank said the performance was driven by “strikingly strong credit”, while investments in technology were paying off.


Danish brewer Royal Unibrew (+16%) was another holding to report market-beating results. The company’s off-trade business was a particular area of strength, helping it deliver net revenue of DKr1.61bn and earnings before interest and taxes (EBIT) of DKr229m, which beat analyst estimates by 8.7% and 18% respectively. Going forward, Royal Unibrew expects the easing of restrictions to boost its on-trade business. It has therefore narrowed its full year EBIT guidance to DKr1.53bn-DKr1.63bn from DKr1.48bn-DKr1.63bn.


United Airlines Holdings’ (-7.8%) share price has rebounded of late, as investors anticipate a return to more normal trading conditions as the world emerges from the pandemic. However, April’s first quarter results served as a stark reminder of the difficulties the business has suffered. It reported an adjusted net loss of US$2.4bn and operating revenue of US$3.2bn, which was 66% lower than Q1 in 2019. Core cash burn remained high at US$9m per day, but had improved from the US$10m a day seen in the fourth quarter of 2020. The company anticipates a return to positive net income when business and long-haul international demand returns to about 35% below 2019 levels.


In the short book, there were diverging fortunes for two semiconductor companies. One saw its share price surge after issuing guidance for the second quarter which was ahead of market expectations. Another contributed to the short book performance after reporting a large net loss for the first quarter.


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







Liontrust GF European Strategic Equity
A4 Acc EUR






MSCI Europe







*Source: Financial Express, as at 30.04.21, 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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