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Liontrust GF SF Pan-European Growth Fund

Q4 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 delivered a return of 9.8% over the period in euro terms, versus the MSCI Europe Index’s 6.4% return (which is the comparator benchmark)*.

The future of sustainable investment has been questioned by a number of different parties recently. Yet, in contrast, we are more excited about the prospects for the sustainable themes and stocks we invest in than we have been for many years.

Interest rates are likely close to peak levels and are predicted to start falling in 2024, with the current higher interest rates quelling inflationary pressures and cooling the economy.

Given this market view and the fact that interest rate rises were the primary catalyst for the sell-off in the long duration ‘growth' equities, and this fund which has a bias to faster growing companies, we could see the valuation multiples applied to growth equities stabilise as interest rate hikes come to an end. This would remove a significant valuation headwind faced by the fund over the past two years.

Indeed, the final quarter of 2023 delivered strong performance for investors, with positive returns across most major asset classes as a number of softer inflation prints in the US, Europe and UK eased investor worry regarding the length of time that interest rates would remain at elevated levels.

We are confident about the outlook for our sustainable investment strategies and believe they will build on their long-term positive track record as we back those businesses which are growing profitability while delivering solutions to critical environmental and social problems.

Those businesses which are providing these solutions will potentially access vast growth opportunities. In many cases, the speed and scale of this growth is likely to be underestimated in the valuation of their shares.

This is where the opportunity lies – finding great companies and helping to solve challenges we face as a society and world, whose prospects are undervalued by the market.

In terms of Fund attribution for the fourth quarter, after poorly received Q2 results in August, a more reassuring Q3 update from Adyen sparked a relief rally that recouped some of the lost ground. The company disclosed 22% year-on-year growth in net revenue to 414m and set a medium term growth target of low- to high-twenties revenue growth through to 2026. Adyen operates a global payments platform which services businesses globally. It provides a very important service for a small fee, thereby playing an important role in making transacting online safer and easier. The company is a core part of our Enhancing digital security theme.

Among these notable performers was ASML, the Dutch semiconductor company held under our Improving the efficiency of energy use theme, which remains at the forefront of improving semiconductor fabrication through EUV development and holistic lithography. As with a number of other companies within the semiconductor industry, ASML has performed strongly as expectations of  an interest rate pivot were revived in Q4.

Lifco, the acquirer of medical and industrial companies, was also among the notable contributors, rising after Q3 results which beat expectations. An EBITA margin improvement of 1.2 percentage points to 23.2% lifted earnings ahead of consensus forecasts. The company’s sales growth continues to be driven by acquisitions; net sales rose 16.5% in Q3 despite a 0.5% organic contraction.

Danish wind turbine manufacturer and service provider Vestas Wind Systems posted a better-than-expected third quarter net profit and narrowed its full-year guidance following strength in its services business and higher sales prices. Wind turbine orders more than doubled, driven by higher activity in North American and Europe. Towards the end of the quarter, Vestas received another boost following the announcement of two large orders for wind projects in the US and Australia.

German sportwear company Puma was among the detractors for the period as it was negatively impacted in December by read-across from two competitor firms. Exposed to our Enabling healthier lifestyles theme, Puma has struggled over the year, battling a large overstocking crisis within the sportswear industry and has also faced a substantial de-rating due to global interest rate rises. December saw an underwhelming outlook from Canadian-American company Lululemon, as well as a weaker sales outlook from Nike.

Lonza was another notable detractor. While it confirmed its 2023 guidance of mid-to-high single-digit sales growth, Lonza noted in a capital markets day that the outlook for 2024 will be affected by lost Moderna revenue and a smaller Kodiak Sciences business. It therefore expects its EBITDA margins – on track to be more than 29% this year – to dip to the high twenties.

Exposed to our Providing affordable healthcare theme, Lonza is a Contract Development and Manufacturing Organisation (CDMO), providing outsourcing scale and efficiencies to the pharmaceutical and biotechnology industries in the areas of therapy development and manufacturing. Customers come to Lonza because of its unique end-to-end experience, combined with a history of quality. Many start-ups and smaller players do not have the employee base or maturity to understand the full process of discovery to commercialisation.

With regards to portfolio activity, we initiated a new position in multinational plumbing and heating products distributor Ferguson, under our Building better cities theme. Sanitation is an area of sustainable development which offers a huge opportunity to improve over the coming decades. Clean water, decent toilets and good hygiene are basic human rights, and these also interact with other goals such as education, reducing inequalities and climate action.

We sold the our position in card box manufacturer Smurfit Kappa on asset allocation grounds, recognising the potential integration risk from a proposed large acquisition in the United States. We have recycled the capital to other areas of the portfolio with a higher risk reward ratio.

We also sold our position in life sciences company ABCAM after an acquisition bid at a 40% premium to the share price from Danaher Inc.

Discrete years' performance (%) to previous quarter-end**:
Past performance does not predict future returns.







Liontrust GF SF Pan-European Growth Fund A1 Acc






MSCI Europe













Liontrust GF SF Pan-European Growth Fund A1 Acc






MSCI Europe






* Source: FE Analytics, as at 31.12.23, total return, net of fees and income reinvested

** Source: FE Analytics, as at 31.12.23, primary share class, total return, net of fees and income reinvested

Key Features of the Liontrust GF SF Pan-European Growth Fund

The Fund aims to achieve capital growth over the long term (five years or more) through investment in sustainable securities, mainly consisting of European equities. The Fund is biased towards companies that provide or produce more sustainable products and services as well as having a more progressive approach to the management of environmental, social and governance issues. The Fund will seek to achieve its objective through exposure mainly to equities of companies incorporated in any European Economic Area Member State, the UK and Switzerland, although it can invest globally. In normal conditions the Fund invests at least 75% of its Net Asset Value in European equities. In addition, the Fund may invest in debt securities for liquidity and cash management purposes. Any investment in bonds will be in corporate and government fixed or floating rate instruments which may be rated or unrated up to 25% of the net assets of the Fund. The Fund may also invest in exchange traded funds and other open-ended collective investment schemes. The Fund is not expected to have any exposure to derivatives (contracts whose value is linked to the expected future price movements of an underlying asset) in normal circumstances but may on occasion use them for investment, efficient portfolio management and for hedging purposes. The use of derivatives should not lead to a significant change in the risk profile of the Fund.
5 years or more.
4 (Please refer to the Fund KIID for further detail on how this is calculated)

The Fund is considered to be actively managed in reference to the MSCI Europe Index (the "Benchmark") by virtue of the fact that it uses the benchmark(s) for performance comparison purposes. The benchmark(s) are 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.
The Fund is a financial product subject to Article 9 of the Sustainable Finance Disclosure Regulation (SFDR).
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.

All investments will be expected to conform to our social and environmental criteria. 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. The Fund may, under certain circumstances, invest in derivatives, but it is not intended that their use will materially affect volatility. Derivatives are used to protect against currencies, credit and interest rate moves or for investment purposes. There is a risk that losses could be made on derivative positions or that the counterparties could fail to complete on transactions. The use of derivatives may create leverage or gearing resulting in potentially greater volatility or fluctuations in the net asset value of the Fund. A relatively small movement in the value of a derivative's underlying investment may have a larger impact, positive or negative, on the value of a fund than if the underlying investment was held instead. The use of derivative contracts may help us to control Fund volatility in both up and down markets by hedging against the general market. 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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