- European markets outperform US at the start of 2025.
- 4imprint Group bounces back from recent profit taking, prompted by upbeat trading statement
- Mycronic also moves higher on contract wins
The Fund’s A3 share class returned 3.2%* in euro terms in January. This Fund’s target benchmark, the MSCI Europe Small Cap Index, returned 4.0%.
Following the marked outperformance of the US in 2024, the tables were immediately turned in January 2025 as the MSCI Europe ended the month as one of the best performing developed equity markets.
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 Index were comfortably in positive territory, with IT (+8.7%), communication services (+8.5%) and finance (+8.4%) leading the way while consumer staples (+2.2%), utilities (+2.7%) and real estate (+3.5%) lagged.
Having enjoyed a very strong share price run in the prior two years on the back of good trading, 4imprint Group (+23%) experienced some profit taking in the second half of 2024. However, shares in the promotional merchandise supplier regained momentum in January on the back of an upbeat full-year trading update. Profit before tax for 2024 will be at least $153 million, ahead of market expectations. A 3% revenue increase to $1.37 billion was driven by existing customer order growth of 5%, compensating for a 9% drop in new customer orders.
Norwegian home furnishings group Kid ASA (+16%) issued Q4 results which showed a pickup in sales growth. Shares in the company previously weakened in November on Q3’s 6.7% sales increase, but rallied in January as growth recovered to 11.7%.
Mycronic (+12%), the Swedish supplier of high-precision production tools, announced several new orders towards the end of the month – all from existing clients in Asia, for equipment used in the photomask production process used by electronics and semiconductor industries.
Greggs (-24%) dropped on evidence of a slowdown in trading. While 2024 sales rose 11% overall and 5.5% on a like-for-like basis, this included a deceleration in Q4 to 2.5% like-for-like growth. Although Greggs commented that full-year profit expectations will be hit, this has relied on cost control measures. During the second half of 2024, Greggs saw subdued consumer confidence weigh on customer visits and spend.
Shares in Gamma Communications (-14%) gave up ground over the month, despite issuing a trading update which reiterated trading had been on course to meet market expectations for the year to 31 December 2024. Previously, at the interim results stage in September the B2B telecoms provider had raised earnings guidance to the top end of the consensus range at the time.
Positive contributors to performance included:
4imprint Group (+23%), Kid ASA (+16%) and Mycronic (+12%).
Negative contributors to performance included:
Greggs (-24%), Gamma Communications (-14%) and Fugro (-7.6%).
Discrete years' performance (%) to previous quarter-end:
|
|
Dec-24 |
Dec-23 |
Dec-22 |
Dec-21 |
Dec-20 |
|
Liontrust GF European Smaller Companies A3 Acc EUR |
13.0% |
7.0% |
-17.3% |
33.7% |
7.4% |
|
MSCI Europe Small Cap |
5.7% |
12.7% |
-22.5% |
23.8% |
4.6% |
|
|
Dec-19 |
Dec-18 |
|
Liontrust GF European Smaller Companies A3 Acc EUR |
35.8% |
-19.9% |
|
MSCI Europe Small Cap |
31.4% |
-15.9% |
*Source: Financial Express, as at 31.12.24, total return (net of fees and income reinvested).
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.
- 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.
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 material is issued by Liontrust Investment Partners LLP (2 Savoy Court, London WC2R 0EZ), authorised and regulated in the UK by the Financial Conduct Authority (FRN 518552) to undertake regulated investment business.
It 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.
This information and analysis 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, no representation or warranty is given, whether express or implied, by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified.
This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID) and/or PRIIP/KID, 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. 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.
