Liontrust GF European Strategic Equity Fund

• European markets lag the US on Trump election, before rallying towards the end of the month.
• Significant outperformance from long book drives Fund’s monthly return
• Games Workshop the strongest individual stock, after a trading update upgraded profit guidance

The Fund’s A4 share class returned 2.6%* in euro terms in November. The Fund’s comparator benchmarks, the MSCI Europe Index and HFRX Equity Hedge EUR Index, returned 1.1% and 1.2% respectively.

While Donald Trump’s election victory prompted a strong rally in US shares on the anticipation of market-friendly policies, investors in Europe were less sure what to make of events. The prospect of trade frictions caused some concern, but sentiment improved towards month end and the market rallied. From a sector perspective, IT (+4.3%), communication services (+3.3%) and industrials (+2.9%) fared well while materials (-1.8%) and consumer discretionary (-1.2%) slid the most.

The Fund’s long book drove returns in November, with an average gain of 2.5% outstripping the market’s performance and leveraged by the portfolio’s 108% long exposure, more then compensating for some detractors in the short book (which remains modest in size at just under 30%).

One of the long book’s strongest performers was Games Workshop (+20%), after it announced trading since its last update in mid-September has been better than expected, with six-month revenues to 1 December on track for at least £260 million with profit before tax of over £120 million. The update prompted low single-digit upgrades to analyst’s full-year forecasts, with the share price gains placing Games Workshop on the brink of the FTSE 100 index.

Having released better-than-expected Q3 results showing 1.5% revenue per available room in October, shares in Intercontinental Hotels Group (+16%) benefitted from upgrades to broker earnings estimates in November.

Danish jewellery retailer Pandora (+9.9%) reported Q3 organic sales growth of 11%, including a 7% like-for-rise, with the remainder coming from store network expansion. The company also lifted its 2024 growth guidance to a range of 11% to 12%, the high end of its prior 9% to 12% range.

Weak spots in the long book included Nordic Home textile retailer Kid (-11%), which reported solid Q3 sales but a decline in earnings to an increase in operating costs, and Belgian chemicals group Solvay (-12%), whose Q3 numbers that fell short of investor expectations as selling prices came under pressure.

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

*Source: Financial Express, as at 30.11.24, total return (income reinvested and net of fees).

**Source: Financial Express, as at 30.09.24, total return (income reinvested and net of fees). 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.

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