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Liontrust GF European Smaller Companies Fund

April 2022 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 -0.5%* in euro terms in April. This Fund’s target benchmark, the MSCI Europe Small Cap Index, returned -1.9%.


The April edition of the IMF’s World Economic Outlook highlighted the inflationary impact and economic damage from Russia’s invasion of Ukraine, trimming its 2022 global economic growth forecast from 4.4% to 3.6%, which compares with the 6.1% expansion in 2021.


China’s adherence to a zero-Covid policy through renewed lockdown measures will also exacerbate the strain already being felt in global supply chains, an issue highlighted by Apple’s warning in April of a $4bn to $8bn Q2 headwind from the disruption.


As ever-higher inflation readings feed through, central bankers reiterated their willingness to take sharper action in March. US consumer price inflation of 8.5% in March is the highest in four decades, while the UK equivalent sits at a 30-year high of 7.0%. Minutes from the March meeting of the US Federal Reserve’s rate-setting committee showed some willingness to push through a 50 basis point interest rate increase, and comments later in the month from Fed Chair Jerome Powell appeared to support the case for ‘front-loading’ rate rises.


Despite high inflation expectations, the prospect of interest rate rises is pushing bond yields up sufficiently to boost real yields; the US 10 year yield moved back into positive territory during the month.


The sector return profile of the European market shows that investors responded to these developments by shunning cyclicals in favour of defensive areas. Weak returns from IT (-6.9%), real estate (-5.7%), consumer discretionary (-3.0%), finance (-2.9%) and industrials (-2.8%) dragged the MSCI Europe Index lower, while consumer staples (+4.2%), utilities (+2.6%) and communication services (+2.3%) were among the top performers.


While there was little significant newsflow from the Fund’s stronger holdings in April, there were a couple of investor updates among the portfolio detractors. Impax Asset Management (-12%) shares slid after a quarterly assets under management update showed an 8% fall to £38.0bn. Although the company received net inflows of £468m, market movements and investment performance wiped £3.8bn off the total. The company has seen rapid growth in both its assets under management and share price in recent years as sustainable investing has come to the fore, but this setback led to some profit taking in April.


ATOSS Software (-22%) fell heavily despite stating that it grew sales by 13% in Q1 to 26m, driven by a 77% increase in cloud services. Order intake was also very strong, with software licence order growth of 37% to €11m. In January, shares in the company rose as it increased its 2022 sales forecast to 110m. It maintained this forecast within Q1 results, but the lack of a further upgrade perhaps contributed to the share price weakness.


Although Indivior (+12%) released Q1 results in April, these came on penultimate trading day of the month, after shares in the company had already risen strongly. The pharmaceutical company saw further good growth in its Sublocade treatment for opoid addiction, registering a 14% quarter-on-quarter rise in net revenue to $85m. This helped compensate for the slowdown in its generic-threatened Suboxone treatment and drive 15% growth in overall net revenue to £207m. Indivior maintained its full-year targets.


Positive contributors to performance included:

Tethys Oil (+19%), Indivior (+12%) and Deutsche Pfandbriefbank (+9.0%)


Negative contributors to performance included:

Atoss Software (-22%), Impax Asset Management (-12%) and Marks & Spencer (-11%).


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

Past performance does not predict future returns.






Liontrust GF European Smaller Companies A5 Acc EUR






MSCI Europe Small Cap






*Source: Financial Express, as at 31.03.22, total return (net of fees and income reinvested).

**Source: Financial Express, as at 31.03.22, total return (net of fees and income reinvested). Discrete data is not available for ten full 12-month periods due to the launch date of the portfolio (01.02.17). Investment decisions should not be based on short-term performance.


A Performance Fee for each Performance Period shall be equal to 10% of the amount, if any, by which the Net Asset Value before Performance Fee accrual of the Fund exceeds the Indexed Net Asset Value of the Fund on the last Business Day of the Performance Period. The Performance Period of the Fund is every 12 months ending on the last business day of each calendar year. Details of the Fund's performance fee in the last financial year can be found in the Key Investor Information Document (KIID) which can be obtained free of charge from the Liontrust website.


Key Features of the Liontrust GF European Smaller Companies Fund

Investment objective & policy1

The investment objective of the Fund is to achieve long term capital growth by investing primarily in European smaller companies. The Fund may invest in all economic sectors in all parts of the world, although it is intended it will invest primarily in equities and equity related derivatives (i.e. total return swaps, futures and embedded derivatives) in European companies (including the UK and Switzerland). The majority of the assets of the Fund (more than 85%) are expected to be invested in smaller companies (with a market capitalisation of less than 5 billion euros at the time of the initial investment). In normal conditions, the Fund will aim to hold a diversified portfolio, although at times the Investment Adviser may decide to hold a more concentrated portfolio, and it is possible that a substantial portion of the Fund could be invested in cash or cash equivalents. The Fund may use FX forwards to hedge the Fund’s currency exposures. The Fund has both Hedged and Unhedged share classes available. The Hedged share classes use forward foreign exchange contracts to protect returns in the base currency of the Fund.

Recommended investment horizon

5 years or more

Risk profile (SRRI)2


Active/passive investment style



The Fund is considered to be actively managed in reference to MSCI Europe Small -Cap Index net total return (the “Benchmark”) by virtue of the fact that it seeks to outperform the Benchmark. However the Benchmark is not used to define the portfolio composition of the Fund and the Fund may be wholly invested in securities which are not constituents of the Benchmark.

Notes:  1. As specified in the KIID of the fund; 2. SRRI = Synthetic Risk and Reward Indicator. Please refer to the KIID for further detail on how this is calculated.

Understand common financial words and terms See our glossary

Past performance is not a guide to future performance. The value of an investment and the income generated from it can fall as well as rise and is not guaranteed. You may get back less than you originally invested.

The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.

The portfolio is invested in smaller companies - these stocks may be less liquid and the price swings greater than those in, for example, larger companies. Investment in the Fund involves a foreign currency and may be subject to fluctuations in value due to movements in exchange rates. 


Non-UK individuals: This document is issued by Liontrust International (Luxembourg) S.A., a Luxembourg public limited company (société anonyme) incorporated on 14 October 2019 and authorised by and regulated as an investment firm in Luxembourg by the Commission de Surveillance du Secteur Financier (“CSSF”) having its registered office at 18, Val Sainte Croix, L-1370 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg trade and companies register under number B.238295. UK individuals: This document is issued by Liontrust Fund Partners LLP (2 Savoy Court, London WC2R 0EZ), authorised and regulated in the UK by the Financial Conduct Authority (FRN 518165) to undertake regulated investment business.

This is a marketing communication. It 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. Examples of stocks are provided for general information only to demonstrate our investment philosophy. The investment being promoted is for units in a fund, not directly in the underlying assets. It contains information and analysis that is believed to be accurate at the time of publication but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, forwarded, reproduced, divulged or otherwise distributed in any form whether by way of fax, email, oral or otherwise, in whole or in part without the express and prior written consent of Liontrust. Always research your own investments and if you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances. 

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