Liontrust European Opportunities Fund

Q4 2019 review

The Liontrust European Opportunities Fund returned 1.7%* over the fourth quarter, outperforming the MSCI Europe ex UK index’s 0.9% return. However, the Fund underperformed the 2.6% gain made by the IA Europe ex UK sector.


Market Overview

Global markets enjoyed a positive end to 2019. Returns were underpinned by the US and China reaching a phase one trade deal, the US, Canada and Mexico agreeing on the USMCA trade agreement, accommodative monetary policy, better than expected earnings, and emerging green shoots from manufacturing PMI data.

European equities managed a small positive return of 0.9% during the quarter. As the global backdrop improved, cyclical sectors led with industrials, IT and materials the top performing sectors while telecoms, consumer staples and utilities lagged. Key drivers of outperformance at a stock level were healthcare company Bayer, banks UniCredit and Credit Agricole. At a sector level, a number of holdings in the materials and industrials sectors posted positive gains, contributing to the Funds relative outperformance versus the market. The performance in these areas were offset to a degree by Nokia after its profit warning in October.

 

Outlook

The portfolio maintains a strong value bias, with valuations at a material discount to both the market and peers. As recession fears recede and risk assets are supported by accommodative monetary policy and a recovery in global economic data, we see room for the sharp outperformance of growth over value to begin to reverse.

 

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

 

Dec-19

Dec-18

Dec-17

Dec-16

Dec-15

Liontrust European Opportunities C Acc

12.9

-24.8

21.7

29.1

9.3

MSCI Europe ex UK

20.0

-9.9

15.8

18.6

5.1

IA Europe Excluding UK

20.3

-12.2

17.3

16.4

9.3

Quartile

4

4

1

1

2

 

*Source: Financial Express, as at 31.12.2019, total return (net of fees and income reinvested)

 

**Source: Financial Express, as at 31.12.2019, total return (net of fees and income reinvested)

 

For a comprehensive list of common financial words and terms, see our glossary here.

 

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 Global Equity (GE) team may involve investment in smaller companies - these stocks may be less liquid and the price swings greater than those in, for example, larger companies. Investment in funds managed by the GE team may involve foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The team may invest in emerging markets/soft currencies or in financial derivative instruments, both of which may have the effect of increasing volatility. Some of the funds managed by the GE team hold a concentrated portfolio of stocks, meaning that if the price of one of these stocks should move significantly, this may have a notable effect on the value of that portfolio.

 

Disclaimer

 

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.

Thursday, January 23, 2020, 3:32 PM