European equity markets saw an encouraging quarter, with the Fund outperforming its benchmark. Gains from Spotify, Topicus, and IPO newcomer Asker offset weakness in AutoStore and Nagarro, while additions to Vestas and ICON support the outlook for continued growth.
It was an encouraging quarter for our European Equity Funds. The Sustainable Future European Growth Fund delivered 7.7% over the three months. That's 2.2% ahead of the benchmark. We saw strong returns from Spotify, part of our 'encouraging sustainable leisure' theme, which is cementing its position as the dominant platform for music, podcasts, and audio books. We also saw strong return from Topicus, which provides software to healthcare, education and social services across Europe. Finally, we have participated in the IPO of Asker, a Swedish provider of medical products and solutions. It is aligned with our theme of 'providing affordable healthcare'. Pleasingly, it performed very well over the period, rising nearly 50%.
Amongst the detractors were AutoStore, which makes robotic systems for warehouses, and it saw a falloff in orders. And also Nagarro, the IT consultant outsourcing company.
There were a few changes to the portfolio. We exited our position in AutoStore. We believe it could see strong adoption, but there's much uncertainty as to when that demand comes through. And we also exited from Trustpilot, which has performed well. Alongside the investment in Asker that I mentioned, we also added to Vestas, the leading wind turbine manufacturer, where we anticipate a margin recovery that will better translate revenue growth into earnings. That's something it has struggled with in the past. We also added to ICON. ICON provides outsourced drug trials and other services to pharmaceutical companies, accelerating 'innovation in healthcare', one of our key investment themes.
Our positioning remains focused on mid-cap quality growth companies that are aligned with our sustainable investment themes. Our analysis suggests that these continue to offer strong growth over the coming years, and yet they are trading at significant valuation discounts to their historic average. For this reason, while we are encouraged by this recent period of strong performance, we believe there is so much more to come.
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.
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