Liontrust GF European Smaller Companies

• Eurozone shares experienced a decline in October, driven by concerns over economic growth and uncertainty surrounding the outcome of the US presidential election.
• Within the MSCI Europe index, the real estate, IT and materials sectors fell, while only the energy sector posted gains.
• Italian bank BPER Banca rose after its forecasted earnings were well-received by the market, while market and consumer analytics firm Ipsos faced challenges after cutting its guidance for 2024 organic growth.

The Fund’s A3 share class returned -2.9%* in euro terms in October. This Fund’s target benchmark, the MSCI Europe Small Cap Index, returned -4.5%.

Eurozone shares experienced a decline in October, driven by concerns over economic growth and uncertainty surrounding the outcome of the US presidential election. The weakest-performing sectors were information technology (-7.2%), real estate (-6.8%) and materials (-6.5%). In contrast, only the energy sector (+0.2%) posted a positive return for the month.

As the Q3 earnings season progressed, there were a few notable weaker-than-expected releases within the information technology sector. The consumer discretionary sector also faced setbacks, with quarterly updates from several car manufacturers and some luxury goods companies falling short of market expectations.

In October, the European Central Bank (ECB) reduced interest rates by 25 basis points. However, a rise in inflation and an accelerated pace of economic growth suggest that further rate cuts may not be imminent.

Italian bank BPER Banca (+11%) was the top performer over the month following the release of a promising new business plan, white its forecast for earnings were also well received by the market. Under its new business plan, the banking group now expects €4.3 billion in aggregate net earnings for the 2025-27 period, underpinned by lower costs and growth in loan volumes as well as commission and fee income.

Shares in Swedish online gambling company Betsson (+11%) moved higher after a positive Q3 results release. Over the three months, Betsson reported an 18% increase in group revenue to €280 million, driven by high customer activity in Latin America, Western Europe and Central and Eastern Europe and Central Asia, while new record levels in customer deposits and gaming turnover also helped push revenue higher.

Strong year-to-date net profit of DKK 1.8 billion helped Danish bank Ringkjoebing Landbobank (+6.9%) forecast net income for the full year at the top of its prior  range of DKK 2.00 billion to DKK 2.35 billion.

Turning to the detractors, Ipsos (-20%) fell sharply after the market and consumer analytics firm cut its guidance for 2024 organic growth to 1% from around 3% previously amid a weaker-than-expected third quarter. While Ipsos said it continues to see solid growth in Continental Europe, the Middle East and Latin America, the company has struggled with a tougher market environment in the US.

Norwegian Air Shuttle (-20%) shares fell after reporting lower-than-expected profit for Q3. The company explained that its 2025 capacity growth will be slowed due to ongoing strikes at aircraft manufacturer Boeing, causing delays to aircraft deliveries that are already behind schedule.

Greggs (-13%), the UK-based bakery chain, was also among the fallers after it reported slower growth in the third quarter than in the first half of the year.

Positive contributors to performance included:

BPER Banca (+11%), Betsson (+11%), Ringkjoebing Landbobank (+6.9%)

Negative contributors to performance included:

Ipsos (-20%), Norwegian Air Shuttle (-20%), Greggs (-13%)

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

 *Source: Financial Express, as at 31.10.24, total return (net of fees and income reinvested).

**Source: Financial Express, as at 30.09.24, total return (net of fees and income reinvested). Discrete data is not available for ten full 12-month periods due to the launch date of the portfolio (01.02.17). Investment decisions should not be based on short-term performance.

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.

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. If one of these investments falls in value this can have a greater impact on the Fund's value than if it held a larger number of investments. As the Fund is primarily exposed to smaller companies there may be liquidity constraints from time to time, i.e. in certain circumstances, the fund may not be able to sell a position for full value or at all in the short term. This may affect performance and could cause the fund to defer or suspend redemptions of its shares. In addition the spread between the price you buy and sell units will reflect the less liquid nature of the underlying holdings. 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. Counterparty Risk: any derivative contract, including FX hedging, may be at risk if the counterparty fails.

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.