Liontrust European Growth Fund

April 2019 review

The Fund returned 2.7%* in sterling terms in April, compared with the 4.0% return from the MSCI Europe ex-UK index.


European equities extended their run of gains to four months. The market’s march higher continued to stem from the US Federal Reserve’s switch to a more dovish rhetoric and ongoing trade negotiations between China and the US. The market was also enthused by strong economic data from the world’s two largest economies.


The US posted another month of robust jobs growth with a non-farm payrolls figure of 196,000 in March, rebounding strongly from the 33,000 job additions seen in the previous month and outstripping the consensus estimate of 180,000. Importantly for stocks, wage pressure seemed relatively muted which made it unlikely that the Fed would turn its eye back to rate increases.


China meanwhile maintained its pace of GDP growth in the first quarter of 2019, with a print of 6.4%. This was despite the trade tensions with the US and above the market’s estimate of 6.3%. Similarly in the US, GDP growth of 3.2% came in considerably ahead of the 2.3% Wall Street forecast. However, this figure was flattered by a build-up in inventories, which could reverse next quarter. 


European equities’ advance in April was this time led by cyclical sectors, a reversal of the trend seen in March. In sterling terms, IT (+9.0%) was the best performing sector followed by industrials (+7.5%) and financials (+7.4%). The worst performing sectors were health care (-2.3%), real estate (-1.3%) and energy (-1.3%).


Atlas Copco (+16.5%) was a highlight for the Fund in the industrial space. The company managed to deliver consensus beating results despite mixed customer demand. In the first quarter of 2019, adjusted operating profit increased 10% to Skr5.26bn, coming in ahead of the consensus estimate of Skr5.05bn. Order intake grew 8% year-on-year, mainly due to sizeable orders for large industrial and gas and process compressors.


There was less positive news from oil refining company Neste (-6.3%). It released first quarter results, which showed operating profit slowing to €378m from €401m. A decline was already built into consensus expectations given last year’s €140m impact from the US Blender’s Tax Credit 2017, but the fall was greater than the average market forecast. The company’s Oil Products division suffered from tough market conditions, resulting in a 26% decrease in operating profit. In contrast, the Renewable Products segment produced its best ever quarterly operating profit of €337m.


French metal company Eramet (+25.2%) was the Fund’s best performer after it signed an agreement with the government of New Caledonia to export 4 million tonnes of nickel ore per year. This agreement will reduce Eramet subsidiary Societe Le Nickel’s cash costs by US$0.60 per pound of nickel by 2021, keeping it on track for its target to reduce total cost by US$1.30/lb.


We continued to phase in the changes from our annual review of companies’ reports and accounts. In April, we bought the following stocks: Adidas, AP Moller-Maersk, Recordati and Telenor. Deutsche Boesrse, Koninklijke Philips, Siltronic and Stora Enso.

Positive contributors to performance included:

Eramet (+25.2%), Atlas Copco (+16.5%) and Deutsche Pfandbriefbank (+13.2%).


Negative contributors to performance included:

Novo Nordisk (-7.0%), Neste (-6.3%) and Roche (-4.7%).


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







Liontrust European Growth I Inc






MSCI Europe ex UK






IA Europe Excluding UK













*Source: Financial Express, as at 30.04.2019, 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 31.03.2019, total return (net of fees and income reinvested), bid-to-bid, primary class.

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Key Risks


Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. Investment in Funds managed by the Cashflow Solution team involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The Liontrust European Growth Fund holds a concentrated portfolio of stocks, if the price of one of these stocks should move significantly, this may have a notable effect on the value of the respective portfolio. The Liontrust Global Income Fund's expenses are charged to capital. This has the effect of increasing dividends while constraining capital appreciation. 




The information and opinions provided 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. Always research your own investments and (if you are not a professional or a financial adviser) consult suitability with a regulated financial adviser before investing.

Friday, May 17, 2019, 11:24 AM