The Fund’s A4 share class returned 1.1%* in euro terms in June. The Fund’s comparator benchmarks, the MSCI Europe Index and HFRX Equity Hedge EUR Index, returned -1.0% and 1.1% respectively.
The European Central Bank became the second major central bank to cut interest rates in June, lowering its deposit rate from an all-time high of 4% to 3.75%, moving before both the US Federal Reserve and the Bank of England. While the move was widely expected, stickier-than-expected services inflation meant that the ECB was keen to point out that the path to any further rate cuts is heavily data dependent.
Elsewhere, the result of the European parliamentary elections caused French president Macron to announce a surprise election in France – this caused the French market to fall sharply at the halfway stage of the month, hampering the wider European market’s returns. Sector returns for the MSCI Europe Index were largely negative in June with the exception of information technology (+8.4%) and healthcare (+3.0%). The real estate (-5.0%), industrials (-3.4%), materials (-2.9%) and financials (-2.8%) sectors were the largest fallers for the period.
The Fund generated strong absolute performance in June, despite starting the month with a c.79% net market exposure in the face of a falling market. This outperformance was driven by an excellent showing from the short book. The short book accounts for around c.32% of Fund NAV but made an outsized positive contribution of 2.2% during the month, as its positions were among the stocks hit the very hardest by the market sell-off.
Top contributors from the portfolio’s long book included Adobe, after the company projected strong future sales for its suite of creative products, suggesting customers are adopting the company’s new artificial intelligence-based tools. In addition, the software specialist raised its fiscal-year profit forecast to as much as $18.20 per share, excluding some items, compared with a previous outlook of $18 per share.
Novo Nordisk continued its strong performance this year, rising after announcing that it is investing $4.1 billion to expand its US manufacturing and boost production of its blockbuster weight-loss drugs to meet surging demand. The Danish pharmaceutical group commented that the project will double the company’s production footprint in the US, with the extra capacity coming online between 2027 and 2029.
ASML, a specialist in the development and manufacturing of photolithography machines which are used in the production of semiconductor chips, was among the notable performers in June. Shares in the company rose following reports that this year’s sales could be boosted by a shipment of its latest chipmaking machine to Taiwan Semiconductor Manufacturing Company (TSMC).
Notable contributors in the short book included a Norway-based hydrogen company which fell consistently over the month, and a French pharmaceutical supplier which dropped following the news it has engaged a third-party mediator to handle financing discussions with creditors as it struggles to serve a growing pile of debt.
Ipsos (-12%), the French market research and consulting firm, and automaker Renault (11%) were among the detractors in the long book after being caught up in the market wide sell off in France as the index tumbled as the prospect of a far-right government and leftwing opposition rattled European financial markets.
Discrete years' performance (%) to previous quarter-end**:
|
|
Jun-24 |
Jun-23 |
Jun-22 |
Jun-21 |
Jun-20 |
|
Liontrust GF European Strategic Equity A4 Acc EUR |
14.7% |
3.1% |
31.7% |
36.9% |
-15.5% |
|
MSCI Europe |
13.7% |
16.7% |
-6.5% |
27.9% |
-5.5% |
|
HFRX Equity Hedge EUR |
6.8% |
0.6% |
2.0% |
6.6% |
0.3% |
|
|
Jun-19 |
Jun-18 |
Jun-17 |
Jun-16 |
Jun-15 |
|
Liontrust GF European Strategic Equity A4 Acc EUR |
2.5% |
3.0% |
5.3% |
2.9% |
10.1% |
|
MSCI Europe |
4.5% |
2.8% |
18.0% |
-11.0% |
13.5% |
|
HFRX Equity Hedge EUR |
-6.3% |
3.5% |
6.0% |
-9.4% |
1.9% |
*Source: Financial Express, as at 30.06.24, total return (income reinvested and net of fees). **Source: Financial Express, as at 30.06.24, 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.
