The Fund’s A4 share class returned 1.7%* in euro terms in May. The Fund’s comparator benchmarks, the MSCI Europe Index and HFRX Equity Hedge EUR Index, returned 3.3% and 1.1% respectively.
Global markets performed strongly in May as investors continued to anticipate interest rate cuts from central banks. Despite economic data showing that eurozone CPI increased to 2.6% in May from 2.4% in April, investors in Europe continue to expect a 25 basis point rate cut when the ECB meets in June. Sector returns for the MSCI Europe Index were largely positive in May with the exception of energy (-1.8%). The financials (+6.3%), industrials (+5.3%), real estate (+5.1%) sectors led the way with strong returns for the period.
While the Fund’s long book performed strongly, returning 5.3% − ahead of the MSCI Europe return, overall Fund returns were restricted by its short book (c.35% NAV).
Kongsberg Gruppen (+20%), the Norwegian developer and maker of high-tech aerospace and defence products, was the long book’s top performer over the month. Its shares carried momentum throughout the month after Kongsberg reported estimate-topping earnings on the final day of April and received an additional share price boost from a ratings upgrade.
Swiss bank UBS (+17%) was also among the top performers in May, returning to profit after two straight quarterly losses, driven by its wealth management and investment banking divisions. The company reported net profit of $1.8 billion in the first three months of the year, well ahead of analyst estimates. Its wealth management business posted new assets of $27 billion, with revenues up $500 million to $6.1 billion), driven by the Americas, Switzerland and Asia-Pacific markets.
Shares in Auto Trader (+17%), the automotive marketplace, rose as the company benefitted from robust demand in the used car market. In the year to March, the company saw revenue increase by 14%, from £500 million to £571 million. Sales rose 12 per cent to £530million, while leasing specialist Autorama saw a 51 per cent increase to £41.2 million.
French carmaker Renault (+19%) was another to perform strongly towards the end of the month following two separate ratings upgrades.
Among the Fund’s long book detractors was Adobe (-5.4%). The software company fell towards the end of the month after a negative read-across from Saleforce’s disappointing sales and guidance release.
Among the detractors in the Fund’s short book was a US movie theatre chain which received a share price boost following a revival in investor exuberance on social media around the stock. Other short positions to detract from returns were a German used-car dealer which rose after it lifted its gross profit forecasts for the year, and a Norwegian fuel cell company which signed a key agreement with an international partner.
Discrete years' performance (%) to previous quarter-end**:
|
|
Mar-24 |
Mar-23 |
Mar-22 |
Mar-21 |
Mar-20 |
|
Liontrust GF European Strategic Equity A4 Acc EUR |
15.4% |
7.6% |
28.9% |
28.2% |
-13.9% |
|
MSCI Europe |
14.8% |
3.8% |
9.3% |
35.3% |
-13.5% |
|
HFRX Equity Hedge EUR |
7.7% |
-4.6% |
7.9% |
22.3% |
-11.3% |
|
|
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Liontrust GF European Strategic Equity A4 Acc EUR |
4.2% |
0.3% |
10.7% |
-1.1% |
|
MSCI Europe |
5.5% |
-0.4% |
16.9% |
-13.7% |
|
HFRX Equity Hedge EUR |
-7.8% |
5.8% |
4.0% |
-8.2% |
*Source: Financial Express, as at 31.05.24, total return (income reinvested and net of fees).
**Source: Financial Express, as at 31.03.24, total return (income reinvested and net of fees). Discrete data is not available for ten full 12-month periods due to the launch date of the portfolio (25.04.14). Investment decisions should not be based on short-term performance.
Key Features of the Liontrust GF European Strategic Equity Fund
KEY RISKS
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. 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. The Fund uses derivative instruments that may result in higher cash levels. Outside of normal conditions, the Fund may choose to hold higher levels of cash. Cash may be deposited with several credit counterparties (e.g. international banks) or in short dated bonds. A credit risk arises should one or more of these counterparties be unable to return the deposited cash. There is no guarantee that a positive absolute return will be generated over any time period.
DISCLAIMER
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.
