The Fund’s A3 share class returned 4.5%* in euro terms in July. This Fund’s target benchmark, the MSCI Europe Small Cap Index, returned 4.3%.
European shares made a positive return in July with gains for utilities (+7.1%), finance (+3.7%) and real estate (+3.5%) following some strong quarterly earnings releases. There were losses for the information technology (-6.4%) and consumer discretionary (-3.0%) sectors, with the former negatively affected by a rotation out of growth stocks and worries that the US might seek to impose further restrictions on what semiconductor equipment can be sold to China. Meanwhile, weak consumer demand weighed on the luxury goods and automotive segments within the consumer discretionary sector.
From a macroeconomic perspective, softer-than-expected inflation and labour market data in the US heightened expectations of rate cuts, spurring a rotation into small cap stocks and other interest-sensitive asset classes.
Investment platform AJ Bell (+22%) was the portfolio’s top performer in July after its Q3 trading update revealed a 5% increase in customer numbers for the quarter and a 13% annual rise, reaching 528,000 customers. Assets under management for the quarter rose 4% to end the period to 30 June at £83.7 billion, driven by strong net inflows of £1.7 billion for the three months. The company stated that customers were engaging in greater dealing activity, especially in overseas markets, thanks to the resurgent performance of global stock markets.
ATOSS Software (+22%), the provider of software for workforce management, reported that its first half net profit increased to €21.3 million from €16.2 million. ATOSS reiterated its revenue forecast for fiscal 2024, while its forecast for EBIT margin has been lifted to at least 33% from prior guidance of 30%.
Swedish real estate portal operator Hemnet Group (+21%) reported strong Q2 earnings, boosted by strong uptake of the company’s premium listings offerings. Net sales for the period increased by 51% year-on-year to SEK 405 million, while operating profit increased 61% year-on-year to SEK 195.6 million. Hemnet stated that it benefited from a steady increase in the number of published listings as the positive trends in the property market continued with more properties for sale, more transactions and increasing property prices.
Shares in Norwegian Air Shuttle (-13%) fell sharply after the company cut its full-year earnings guidance as traffic demand softened during the second quarter, while new wage settlement agreements with pilots were higher than expected. The company also stated that profitability has been impacted by aircraft delivery delays from Boeing, which has forced the company to source external capacity, while a weaker exchange rate versus the U.S. dollar has also been a headwind. The low-cost carrier expects to report operating profit of between NOK 2.1 billion and 2.6 billion this year, lower than the NOK 2.5 billion to NOK 3.2 billion it had previously guided for.
Swedish electronics manufacturer Mycronic (-10%) weakened over the period after its Q2 earnings fell short of consensus expectations.
Positive contributors to performance included:
AJ Bell (+22%), ATOSS Software (+22%) and Hemnet Group (+21%)
Negative contributors to performance included:
Kid Asa (-15%), Norwegian Air Shuttle (-13%) and Mycronic (-10%)
Discrete years' performance (%) to previous quarter-end:
|
|
Jun-24 |
Jun-23 |
Jun-22 |
Jun-21 |
Jun-20 |
|
Liontrust GF European Smaller Companies A3 Acc EUR |
14.5% |
9.0% |
-9.9% |
59.6% |
-10.7% |
|
MSCI Europe Small Cap |
12.0% |
6.7% |
-17.7% |
43.1% |
-4.1% |
|
|
Jun-19 |
Jun-18 |
|
Liontrust GF European Smaller Companies A3 Acc EUR |
-2.4% |
2.3% |
|
MSCI Europe Small Cap |
-4.4% |
9.8% |
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.
