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Liontrust European Dynamic Fund

August 2023 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 returned -1.1%* in sterling terms in August. The MSCI Europe ex-UK Index comparator benchmark returned -2.5% and the average return made by funds in the IA Europe ex-UK sector, also a comparator benchmark, was -2.5%.


Global markets fell at the start of the month after the credit rating agency Fitch downgraded the US government’s credit rating from AAA to AA+, citing unsustainable debt and increased political dysfunction. Elsewhere, renewed stress in the Chinese property market and underwhelming macroeconomic data out of China triggered an increase in market volatility.


The Eurozone economy grew by 0.3% in the second quarter of 2023 after a flat first quarter, bolstered by a moderation in inflationary pressures. European Central Bank policymakers maintained the possibility of a September rate hike when they raised interest rates in July, with markets pricing in further hikes before the end of the year.


In terms of sector returns for the period, European market weakness was concentrated in consumer discretionary (-6.9%), industrials (-4.3%), IT (-4.0%) and utilities (-4.0%), Energy (+4.0%), healthcare (+1.6%) and real estate (+1.3%) all made gains for the month.


Novo Nordisk (+17%), the Danish pharmaceutical group behind top-selling obesity drug Wegovy, was the top performer over the period after lifting its annual sales forecasts, now expecting sales to grow 27-33% this year and operating profit to climb between 31-37%, exceeding prior expectations. The improved outlook for Novo was driven by higher than expected demand in the US for Ozempic – its diabetes drug that some clinicians have been prescribing to patients to tackle obesity as it contains the same active ingredient as Wegovy.


Danish jewellery brand Pandora (+5.2%) was another notable positive performer after strong Q2 revenue prompted the company to revise guidance upward for the second time this year. The company now anticipates positive growth of between 2% and 5% for the full year – an increase from the -3% to +3% the company had forecasted at the start of the year. 


France-based financial services provider Société Generale (+6.0%) reported net income of €900m during the second quarter, exceeding average analyst estimates.


German airline Deutsche Lufthansa (-10%) reported record profits for the second quarter, while also forecasting continuing post-pandemic travel demand and high ticket prices for the remainder of the year. However, the company also indicated that capacity offered by its airlines would be at the lower end of previous guidance because of “persisting bottlenecks in the European air traffic system”.


German logistics and mail group DHL (-7.9%) reported a drop in quarterly revenue and earnings over the month following a slump in freight volumes and prices. Despite this, the company raised the lower end of its 2023 profit guidance range, seeing annual EBIT between 6.2 billion - 7 billion, having previously forecast a figure between 6 and 7 billion.


Positive contributors to performance included:

Novo Nordisk (+17%), Société Generale (+6.0%) and Pandora (+5.2%)


Negative contributors to performance included:

Evolution (-11%), Deutsche Lufthansa (-10%), DHL Group (-7.9%)


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


Past performance does not predict future returns








Liontrust European Dynamic

I Inc






MSCI Europe ex UK






IA Europe Excluding UK













*Source: Financial Express, as at 31.08.23, total return (net of fees and income reinvested), bid-to-bid, institutional class. Non fund-related return data sourced from Bloomberg.


**Source: Financial Express, as at 30.06.23, total return (net of fees and income reinvested), bid-to-bid, primary class.

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.

Overseas investments may carry a higher currency risk. They are valued by reference to their local currency which may move up or down when compared to the currency of the Fund. This Fund may have a concentrated portfolio, i.e. hold a limited number of investments. If one of these investments falls in value this can have a greater impact on the Fund's value than if it held a larger number of investments. The Fund may encounter liquidity constraints from time to time. The spread between the price you buy and sell shares will reflect the less liquid nature of the underlying holdings.
Outside of normal conditions, the Fund may hold higher levels of cash which may be deposited with several credit counterparties (e.g. International banks). A credit risk arises should one or more of these counterparties be unable to return the deposited cash. Counterparty Risk: any derivative contract, including FX hedging, may be at risk if the counterparty fails.


This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID), which provide full product details including investment charges and risks. These documents can be obtained, free of charge, from www.liontrust.co.uk or direct from Liontrust. Always research your own investments. 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.

This 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.

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