The Fund’s A5 share class returned 0.4%* in euro terms in July. This Fund’s target benchmark, the MSCI Europe Index, returned 1.2%.
European shares made a positive return in July with gains for utilities (+7.1%), finance (+3.7%) and real estate (+3.5%) following some strong quarterly earnings releases. There were losses for the information technology (-6.4%) and consumer discretionary (-3.0%) sectors, with the former negatively affected by a rotation out of growth stocks and worries that the US might seek to impose further restrictions on what semiconductor equipment can be sold to China. Meanwhile, weak consumer demand weighed on the luxury goods and automotive segments within the consumer discretionary sector.
The Fund’s top performer in July was Italian bank UniCredit (+9.7%) which raised its full-year target for net revenue after higher income from fees and lending helped the bank’s Q2 profit beat consensus estimates. Net income rose 16% to €2.68 billion, leading to the Milan-based bank increasing its guidance for revenue after loan-loss provisions to above €23 billion.
UK catering contractor Compass Group (+12%) lifted its full-year guidance after reporting growth across all regions and improved net new business in the third quarter of fiscal 2024. Compass’ organic revenue for Q3 grew 10% to 30 June, a slight slowdown from 11.2% at the half-year. However, the company stated that net new business growth accelerated in the quarter, while pricing moderated in line with inflation. Compass raised its full-year expectations off the back of its quarterly performance, now targeting underlying operating profit growth above 15%.
ASML (-12%) fell sharply as the prospect of more severe US restrictions on its business in China outweighed growth in the Dutch firm’s order intake last quarter. Shares in the developer and manufacturer of photolithography machines fell even as the company reported that bookings rose 54% in the second quarter from the previous three months to €5.57 billion, beating average estimates.
A.P Moller Maersk (-13%) shares suffered after it warned extreme weather conditions and a storm surge lashing the South African coast are expected to cause shipping delays.
Danish pharmaceutical giant Novo Nordisk (-9.4%) fell after a study suggested there may be a link between its blockbuster weight loss drugs Wegovy and Ozempic and vision loss.
Positive contributors to performance included:
UniCredit (+9.7%), Caixabank (+9.0%), Compass Group (+12%)
Negative contributors to performance included:
Novo Nordisk (-9.4%), ASML (-12%), AP Moller-Maersk (-13%)
Key Features of the Liontrust GF Pan-European Growth Fund
The investment objective of the Fund is to achieve capital growth over the long-term by predominantly investing in a portfolio of European equities. The Investment Adviser will seek to achieve the investment objective of the Fund through investment of at least 80% of the Fund’s Net Asset Value in companies which are incorporated, domiciled, listed or conduct significant business in Europe (the EEA, Switzerland and the UK). The Fund will not be restricted in its choice of investment by either size or sector.
The Fund is considered to be actively managed in reference to MSCI Europe Index (the “Benchmark”) by virtue of the fact that it uses the Benchmark for performance comparison purposes and for certain Performance Fee Share Classes, to calculate performance fees. The Benchmark is not used to define the portfolio composition of the Fund and the Fund may be wholly invested in securities which are not constituents of the Benchmarks.
The Fund is not expected to have any exposure to financial derivative instruments in normal circumstances, but the Investment Adviser may on occasion, where it deems it appropriate in seeking to achieve the investment objective of the Fund, use financial derivative instruments listed on a recognised exchange or traded on an organised market or financial derivative instruments traded over-the-counter for investment purposes, efficient portfolio management, and hedging purposes.
In addition, the Fund may invest in exchange traded funds and other eligible open-ended collective investment schemes. No more than 10% of the net assets of the Fund will be invested in aggregate in open-ended collective investment schemes. The Fund may invest in closed-ended funds that qualify as transferable securities. Investment in closed-ended funds is not expected to comprise a significant portion of the Fund’s net assets and will not typically exceed 10% of net assets.
For liquidity or cash management purposes, a proportion of the Fund may also be invested in debt securities including government and corporate bonds, Money Market Instruments, cash and near cash and deposits. Any investment in bonds will be in investment grade corporate and government fixed or floating rate instruments.The Fund is considered to be actively managed in reference to the MSCI Europe Index (the “Benchmark”) by virtue of the fact that it uses the Benchmark for performance comparison purposes and to calculate performance fees. The Benchmark is not used to define the portfolio composition of the Fund and the Fund may be wholly invested in securities which are not constituents of the Benchmark.
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.
Overseas investments may carry a higher currency risk. They are valued by reference to their local currency which may move up or down when compared to the currency of the Fund. This Fund may have a concentrated portfolio, i.e. hold a limited number of investments (35 or fewer) or have significant sector or factor exposures. If one of these investments or sectors / factors fall in value this can have a greater impact on The Fund's value than if it held a larger number of investments across a more diversified portfolio. The fund’s investment objective is to target capital growth for investors. Growth stocks tend to pay out lower levels of dividend resulting in lower income yields and may produce more volatile returns than the market as a whole. Outside of normal conditions, the Fund may hold higher levels of cash which may be deposited with several credit counterparties (e.g. international banks). A credit risk arises should one or more of these counterparties be unable to return the deposited cash. 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.
DISCLAIMER
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.
This 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. Examples of stocks are provided for general information only to demonstrate our investment philosophy. The investment being promoted is for units in a fund, not directly in the underlying assets. It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, forwarded, reproduced, divulged or otherwise distributed in any form whether by way of fax, email, oral or otherwise, in whole or in part without the express and prior written consent of Liontrust.
