- European markets outperform US at the start of 2025
- Logitech International among the top contributors after lifting growth guidance
- Hermes also a highlight as European luxury sector rises on Richemont read across
The Fund returned 7.9% in sterling terms in January. The MSCI Europe ex-UK Index comparator benchmark returned 8.2% and the average return made by funds in the IA Europe ex-UK sector, also a comparator benchmark, was 7.6%.
Following the marked outperformance of the US in 2024, the tables were immediately turned in January 2025 as the MSCI Europe ex-UK ended the month as the best performing developed equity market.
Following a fairly sharp upwards adjustment in interest rate expectations during Q4 of last year, as some forecast rate cuts were scrubbed out by economists, global investor sentiment was boosted in January by US inflation data that came in marginally below expectations. The mood was further lifted by a delay in implementing much-feared trade tariffs following Trump’s US inauguration on the 20th, although the threat continued to loom large at month end.
European markets’ strong monthly performance compared to the US was in large part due to its relative insulation from the technology sector sell-off sparked by seemingly transformative AI progress from China’s DeepSeek. While the US market rolled over in the last week of the month as mega-cap tech names such as Nvidia adjusted sharply lower, the European market held on to strong gains.
All sectors of the MSCI Europe ex-UK index were comfortably in positive territory, with communications services (+12%), finance (+10%) and consumer discretionary (+10%) leading the way while real estate (+4.0%), consumer staples (+4.0%) and utilities (+4.4%) lagged.
Logitech International (+23%), the Swiss manufacturer of computing peripherals such as keyboards and webcams announced an upbeat set of Q3 results which included upgraded full-year guidance. Sales growth of 7% to $1.34 billion was driven by gaming sales which were near the highs reached during the pandemic. As a result, Logitech raised its full-year sales growth target range from 2% - 4% to 5.4% - 6.4%.
French fashion house Hermes (+12%) continued its recent outperformance of the European market and the consumer goods sector, as it benefitted from positive read across from luxury peers Richemont and Burberry.
To the downside, container shipping giant AP Moller-Maersk (-9.6%) gave back some of the prior weeks’ gains, as a looming US dockworkers strike – which likely would have led to a spike in shipping rates – was called off. By contrast, Finnish crane manufacturer Konecranes (-3.6%) suffered due to industrial actions, as one of the country’s largest industrial unions announced a three-day strike.
Positive contributors to performance included:
Logitech International (+23%), Hermes International (+19%) and UniCredit (+17%).
Negative contributors to performance included:
AP Moller-Maersk (-9.6%), Konecranes (-3.6%) and Kingspan (-3.3%).
Discrete years' performance (%) to previous quarter-end**:
|
|
Dec-24 |
Dec-23 |
Dec-22 |
Dec-21 |
Dec-20 |
|
Liontrust European Dynamic I Inc |
2.8% |
16.9% |
0.7% |
24.0% |
20.1% |
|
MSCI Europe ex UK |
1.9% |
14.8% |
-7.6% |
16.7% |
7.5% |
|
IA Europe Excluding UK |
1.7% |
14.0% |
-9.0% |
15.8% |
10.3% |
|
Quartile |
2 |
2 |
1 |
1 |
1 |
*Source: Financial Express, as at 31.12.24, total return (net of fees and income reinvested), bid-to-bid, institutional class. Non fund-related return data sourced from Bloomberg.
**Source: Financial Express, as at 31.12.24, total return (net of fees and income reinvested), bid-to-bid, primary class.
KEY RISKS
Past performance does not predict future returns. You may get back less than you originally invested.
We recommend this fund is held long term (minimum period of 5 years). We recommend that you hold this fund as part of a diversified portfolio of investments.
- 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.
- The Fund may encounter liquidity constraints from time to time. The spread between the price you buy and sell shares 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.
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