Liontrust GF European Strategic Equity Fund

• Financial markets rebounded from April’s tariff-driven volatility, with a notable recovery in both US and European equities.
• The short book detracted as equities rose, but with a net exposure of around 50%, the Fund delivered a stronger return than implied by market direction alone.
• Within the long book, top performers included Pandora, AJ Bell and Banco Santander.

The Fund’s A4 share class returned 3.1%* in euro terms in May. The Fund’s comparator benchmarks, the MSCI Europe Index and HFRX Equity Hedge EUR Index, returned 4.7% and 2.5% respectively.

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.

There were positive sector returns across the board in May with information technology (+8.3%) leading the way, closely followed by industrials (+8.1%), and financials (+6.5%) to round out the top three performers.

While the long book on average outperformed the market’s rise, the broad-based market rally created a tough environment for the Fund’s short book (c.38% NAV), which tempered overall Fund returns.

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%.

Investment platform AJ Bell (+18%) reported solid growth in the six months to 31 March 2025, with revenue increasing by 17% to £153 million and pre-tax profit rising 12% to £68.8 million. Customer numbers grew by 51,000, a 9% increase, bringing the total to 593,000. Assets under administration reached £90.4 billion, supported by £3.3 billion in net inflows and an additional £0.6 billion from favourable market movements.

Looking ahead, the company raised its FY25 pre-tax profit margin forecast to over 42%, up from a previous estimate of more than 40%. AJ Bell also announced a 4.5p interim dividend and a £25 million share buyback programme.

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.

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

*Source: Financial Express, as at 31.05.25, total return (income reinvested and net of fees). 

**Source: Financial Express, as at 31.03.25, total return (income reinvested and net of fees). Investment decisions should not be based on short-term performance.

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.