Liontrust GF European Smaller Companies Fund

July 2021 review

The Fund’s A5 share class returned 5.4%* in euro terms in July. This Fund’s target benchmark, the MSCI Europe Small Cap Index, returned 3.7%.


Despite a mid-month wobble triggered by growing concerns over the spread of the Delta variant of Covid, European equity markets rallied to notch up a small gain for the month. Within this, IT (+5.6%), materials (+4.5%) and real estate (+4.5%) were the strongest areas but energy was the biggest laggard (-3.2%) by some margin.


The oil price was broadly flat on the month, finishing at US$76.3 a barrel, but there was some intra-month volatility on the global growth concerns and following an Opec meeting at which the cartel decided to restore output to pre-pandemic levels, but only by the end of 2022.


The pattern of equity market returns was not mirrored by bond markets – the mid-month dip in investor sentiment drove yields down but they did not rebound as equities recovered. Partial explanation for this pattern could be found in the key central bank policy announcements during the month: firstly, the European Central Bank said it could tolerate inflation temporarily higher than its new 2% target, opening the door for loose policy to be retained; and the US Federal Reserve commented that, although progress had been made towards its employment and inflation goals, it was still too early to tighten policy.


Within the Fund, shares in Belimo (+13%) were once again among the top contributors. Having made gains in June on the back of an upbeat trading statement, it made further headway in July after the release of interim results. Belimo guided towards year-on-year net sales growth of about 10% in its trading update but went on to report a 17% local currency gain. The Swiss air-con actuator manufacturer commented that a faster-than-expected rebound in construction activity had driven a rapid return to above average sales growth.


Market research company Ipsos (+12%) reported interim revenue of just shy of 1bn – organic growth of 32% over 2020’s level and 14% higher than 2019. It has seen a very robust recovery in all regions, which has been matched by only a moderate 8% increase in payroll, resulting in a strong gearing effect on operating profit – up from €25m to €109m.


Pump manufacturer Concentric’s (+12%) Q2 results showed a 45% constant currency year-on-year rebound in sales, diluted to 38% in reported terms by the strength of the Swedish krone. Demand for its engine and hydraulic products has improved as the year has gone on, with raw material supply now one of the main constraints on short-term growth. Reported sales rose 10% on Q1, and the company stated that orders received and expected to be fulfilled in Q3 are significantly higher again over the Q2 level.


With around half its revenues generated in France, catering and support services group Elior (-8.3%) may have been viewed as one of the more vulnerable to the spike in Delta Covid cases in the country and the imposition of any associated public health restrictions. Late in the month, Elior issued Q3 results showing a 39% year-on-year bounce in revenues to now sit at 74% of the pre-Covid comparable (March – June 2019).


As a provider of digital workforce management tools, ATOSS Software (-7.9%) has been much better placed to withstand the business changes brought about by the pandemic, most notably a big shift towards remote working. It issued results showing a 13% year-on-year increase in sales in the first half of 2021, with cloud and subscription sales rising by more than 50%, taking the proportion of recurring revenues to around half of sales. While the results were strong, they were already priced into the shares and there was little to provide further impetus with the company choosing not to raise its 2021 guidance again having already upgraded earlier this year.


Positive contributors to performance included:

Belimo Holding (+13%), Ipsos (+12%) and Concentric (+12%)


Negative contributors to performance included:

Elior Group (-8.3%), ATOSS Software (-7.9%) and Marks & Spencer (-6.9%).


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






Liontrust GF European Smaller Companies A5 Acc EUR





MSCI Europe Small Cap Index






*Source: Financial Express, as at 31.07.21, total return (net of fees and income reinvested). Non fund-related return data sourced from Bloomberg.


**Source: Financial Express, as at 30.06.21, total return (net of fees and income reinvested). Discrete data is not available for five full 12-month periods due to the launch date of the portfolio. Investment decisions should not be based on short-term performance.


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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, August 13, 2021, 10:02 AM