Liontrust European Dynamic Fund

• Financial markets rebounded from April’s tariff-driven volatility, with a notable recovery in both US and European equities.
• Pandora topped contributors, driven by strong US sales and solid Q1 growth, despite trimming its margin outlook.
• Konecranes, Banco Santander, and Belimo all delivered double-digit gains, supported by upgraded guidance and robust Q1 results.

The Fund returned 6.7% in sterling terms in May. The MSCI Europe ex-UK Index comparator benchmark returned 3.6% and the average return made by funds in the IA Europe ex-UK sector, also a comparator benchmark, was 4.5%.

Financial markets rebounded from April’s tariff-driven volatility, with a notable recovery in both US and European equities. President Trump’s decision to delay tariffs on European goods – including those affecting key industries and firms like Apple – helped ease transatlantic trade tensions and lifted investor sentiment across the eurozone.

The top-performing sectors were information technology (+7.5%), industrials (+7.4%), and financials (+5.6%), while healthcare was the only sector to post a loss, falling by 1.1% over the month as President Trump announced a reform of drug pricing.

Pandora (+22%) was Fund’s top contributor in May, driven by an 11% increase in US sales in Q1 — solidifying the region as the jewellery manufacturers strongest market. North America now accounts for 32% of total revenue. Overall, Pandora reported Q1 revenue of DKK 7.3 billion (approximately $1.1 billion), representing 7% organic growth, while operating profit rose by 9%. While sales trends are positive, the company did acknowledge US trade tariff uncertainty and dollar weakness by trimming its full-year operating margin forecast from 24.5% to 24%.

Konecranes (+16%), a Finnish company specialising in the manufacturing and servicing of cranes and lifting equipment, upgraded its  EBITA margin target range to 13-16%, aiming to reach this level as soon as possible and no later than 2029 (up from the previous range of 12-15%). The upgrade is driven by higher profitability forecasts for its Industrial Service and Industrial Equipment businesses, while its Port Solutions target remains unchanged.

Banco Santander (+13%) continues to deliver strong performance, supported by favourable macroeconomic conditions and robust quarterly results. In the first quarter of 2025, the bank posted a record attributable profit of €3.4 billion, marking a 19% increase compared to the same period last year. This growth was driven by record net fee income, up 4%, and effective cost management. Additionally, Santander expanded its customer base significantly, adding 9 million new clients and bringing its total to 175 million customers worldwide.

Belimo Holding (+14%) continued its rally after releasing a strong Q1 update last month. The HVAC (heating, ventilation & air conditioning) actuator manufacturer reported 21.8% sales growth (local currency) and raised full-year guidance. The company now expects 15–20% sales growth and operating margins above 20% in 2025. Belimo stated that it will implement price increases to fully mitigate any cost impact of new tariffs.

Positive contributors to performance included:

Pandora (+22%), Konecranes (+16%) and Banco Santander (+13%)

Negative contributors to performance included:

Novartis (0.7%), Ericsson (-0.4%) and Industria de Diseno Textil (-0.1%)

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

*Source: Financial Express, as at 31.05.25, 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 31.03.25, total return (net of fees and income reinvested), bid-to-bid, primary class.

KEY RISKS

Past performance does not predict future returns. You may get back less than you originally invested.

We recommend this fund is held long term (minimum period of 5 years). We recommend that you hold this fund as part of a diversified portfolio of investments.

The Funds managed by the Cashflow Solution team:

• May hold overseas investments that 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 a Fund.
• May have a concentrated portfolio, i.e. hold a limited number of investments (35 or fewer) or have significant sector or factor exposures. If one of these investments or sectors / factors fall in value this can have a greater impact on the Fund's value than if it held a larger number of investments across a more diversified portfolio.
• 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 use of derivative instruments that may result in higher cash levels. 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.
• 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, 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.
• May target an absolute return. There is no guarantee that an absolute return will be generated over the time period stated in the fund objective or any other time period.

The risks detailed above are reflective of the full range of Funds managed by the Cashflow Solution team and not all of the risks listed are applicable to each individual Fund. For the risks associated with an individual Fund, please refer to its Key Investor Information Document (KIID)/PRIIP KID.

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.

DISCLAIMER

This material is issued by Liontrust Investment Partners LLP (2 Savoy Court, London WC2R 0EZ), authorised and regulated in the UK by the Financial Conduct Authority (FRN 518552) to undertake regulated investment business.

It 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.

This information and analysis 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, no representation or warranty is given, whether express or implied, by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified.

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