The Fund’s A4 share class returned 1.6%* in euro terms in October. The Fund’s comparator benchmarks, the MSCI Europe Index and HFRX Equity Hedge EUR Index, returned 6.2% and 0.8% respectively.
The chance to focus on Q3 earnings season provided a welcome break from a fairly bleak geopolitical and macroeconomic backdrop. Although the UK political scene saw huge upheaval, European events were more muted by recent standards, with the European Central Bank’s latest policy decision gaining most attention. However, the decision to enact a second consecutive hike of 75 basis points was as expected and priced in by markets.
With company newsflow to the fore, the MSCI Europe index was able to register a solid bounce from this year’s losses. From a sector perspective, the market rally showed a cyclical tilt, with only consumer staples (-2.0%) in negative territory in sterling terms. Energy (+12%) was the biggest riser. After four consecutive down months, the oil price began edging back up towards $100 a barrel again as Opec reduced its production target by 2 million barrels a day. Industrials (+10%), IT (+7.50%) and finance (+7.1%) also recorded large gains.
Given this fairly broad-based bounce, the portfolio’s risers were dominated by long book holdings while the short book suffered losses; overall, the Fund’s participation in the market’s rise was fairly proportionate to its cautious net exposure (c.20%).
Among the long-book’s gainers, Indivior (+19%) rallied after the UK pharmaceuticals group raised full-year net revenue guidance when releasing Q3 results. Quarterly net revenue rose 24% to $232m while operating proift increased 47% to $56m. Its Sublocade treatment for opiod use disorder is growing rapidly, and exceeded $100m in sales for the first time. It is strength in this product which drove the guidance upgrade, with net revenue for 2022 now expected to be $890m – $915m, up from $840m – $900m previously.
Rexel (+17%) upgraded 2022 financial guidance for the second time this year after sales growth accelerated in Q3 to 16% year-on-year on a same-day basis. This increase reflects a pass-through of rising production costs as well as 750 basis points of positive volume effect. The French distributor of electrical equipment says it is experiencing higher demand for electrification as a result of high energy prices. It has raised its full-year same-day sales growth guidance from 7% - 9% to around 12%, while its operating profit margin is expected to be 7.2% (compared with 6.7% previously).
Within the short book, the biggest detractor was a Swedish provider of cloud-based communications platforms, which rallied strongly after Q3 results significantly eased investor concerns around cash flow.
Discrete years' performance** (%), to previous quarter-end:
Past performance does not predict future returns
|
|
Sep-22 |
Sep-21 |
Sep-20 |
Sep-19 |
Sep-18 |
|
Liontrust GF European Strategic Equity |
29.2% |
36.8% |
-14.9% |
3.0% |
2.6% |
|
MSCI Europe |
-11.0% |
28.8% |
-7.8% |
5.7% |
1.5% |
|
HFRX Equity Hedge EUR |
-4.0% |
16.5% |
-2.4% |
-3.5% |
-1.1% |
*Source: Financial Express, as at 31.10.22, total return (income reinvested and net of fees).
**Source: Financial Express, as at 30.09.22, total return (income reinvested and net of fees). Discrete data is not available for ten full 12-month periods due to the launch date of the portfolio (25.04.14). Investment decisions should not be based on short-term performance.
A performance fee of 20% is calculated and accrued at each valuation point. Payment is subject to the Fund's net asset value exceeding an Adjusted Prior Net Asset Value which is a High Water Mark adjusted by any new subscriptions or redemptions and a 4% hurdle per calendar year. No Performance Fee will be payable with respect to a Fund class in any Performance Period unless such class has recovered any accumulated underperformance for previous Performance Periods. Any performance fees are only payable on the positive difference between the NAV and the Adjusted Prior Net Asset Value. Details of the Fund's performance fee in the last financial year can be found in the Key Investor Information Document (KIID) which can be obtained free of charge from the Liontrust website.
Key Features of the Liontrust GF European Strategic Equity Fund
KEY RISKS
Past performance is not a guide to future performance. The value of an investment and the income generated from it can fall as well as rise and is not guaranteed. You may get back less than you originally invested.
The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.
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. Some of the Funds may invest in derivatives. The use of derivatives may create leverage or gearing. A relatively small movement in the value of a derivative's underlying investment may have a larger impact, positive or negative, on the value of a fund than if the underlying investment was held instead. Some of the funds may hold 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.
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This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID), which provide full product details including investment charges and risks. These documents can be obtained, free of charge, from www.liontrust.co.uk or direct from Liontrust. Always research your own investments. If you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances.
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