Liontrust Global Equity Fund

Q4 2019 review

The Liontrust Global Equity Fund returned 3.8%* over the quarter, outperforming the MSCI AC World Index, which returned 1.4% and the IA Global Equity sector average of 1.9%.


Market Overview

Global equities enjoyed a strong quarter as recessionary fears subsided. The main driver behind this was an easing in trade tensions between the US and China, with a phase one trade deal between the two countries agreed towards the end of the quarter. As a result, global bond yields generally rose over the quarter. However, despite this improvement in investor sentiment, value stocks (having rebounded strongly in late Q3 2019), once again underperformed relative to growth stocks. At a sector level, technology led global equities, with healthcare stocks also delivering strong gains. The UK market was one of the strongest performing developed markets, largely driven by the general election result. Not only did the unexpectedly large Conservative Party majority end fears of a Corbyn-led Labour government, given the Tories’ more business-friendly policies, but it also created further certainty regarding the UK’s future relationship with the EU. However, the improved sentiment towards global growth also meant emerging markets outperformed developed markets over the quarter.


Portfolio Attribution

The Fund’s outperformance relative to the MSCI AC World Index and IA Global peer group was primarily driven by its focus on companies that are the leaders and beneficiaries of disruptive growth trends across the global economy. These companies benefited from the improved outlook for the global economy and particularly progress on the outlook for global trade and integration on which they depend, in the form of the Phase 1 US-China trade deal. The largest individual contributors to the Fund’s relative return were NVIDIA, a key enabler of digital disruption particularly in artificial intelligence and Apple, which is presenting an increasingly strong case that it can shift its locus of growth from its iPhone sales cycle to its extremely profitable app-store and other business lines. The biggest relative detractor was the Chicago Mercantile Exchange, in which we retain confidence due to its significant competitive advantages within its industry and its potential to strengthen these through the strategic use of data over the coming years. Furthermore, we expect CME to lag somewhat during periods of market strength and lead during periods of heightened market stress thanks to the increase of trading volumes on its exchanges during volatile market conditions. Indeed, this is an attractive feature of the stock.



We are currently broadly positive on the outlook for global equities. Global economic growth has decelerated and disappointed market expectations for the past two years, halving from around 5% at the start of 2018 to about 2.5% today on an annualised quarter by quarter basis. In 2018, central banks fell behind the curve with respect to this slowdown and almost all asset classes experienced a bear market. In 2019, they got back ahead of the curve and almost all asset classes experienced a bull market. Looking into 2020, we tentatively expect growth to stabilise and then modestly accelerate for the first time in a little while, perhaps up to around 3.5% on an annualised quarterly basis by the end of the year. This would be a welcome development for global equities, particularly if global central banks step aside and allow any acceleration to take hold, which current low core inflation rates would enable them to do. While it is difficult to see multiple expansion as a major driver of global equity returns this year, following its heroic contribution last year, the stabilization and modest acceleration of global growth would likely produce mid-to high digit earnings per share growth, which would provide a decent tailwind for the year. The main risks to this constructive outlook are the upcoming US election and potential geopolitical stresses.


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







Liontrust Global Equity C Acc












IA Global













*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)

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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 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.




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, 4:14 PM