Liontrust European Dynamic Fund

• In March, European financial markets were driven by a number of major global and regional events.
• Top performers included Kongsberg Gruppen, lifted by stronger sentiment toward defence stocks, while financials maintained strong YTD gains.
• Among the detractors were Adyen, Logitech and Pandora.

The Fund returned -3.8% in sterling terms in March. The MSCI Europe ex-UK Index comparator benchmark returned -2.7% and the average return made by funds in the IA Europe ex-UK sector, also a comparator benchmark, was -3.0%.

Throughout March, European financial markets were shaped by a number of major global and regional developments. Chief among them was Germany’s announcement of a substantial increase in public spending on defence and infrastructure. This marked a significant policy shift aimed at bolstering both national and regional resilience in the face of Russia’s threat, with broad implications for sectors such as construction, engineering, and defence.

Donald Trump’s threat to impose sweeping import tariffs also weighed heavily on market sentiment. The escalation of trade war rhetoric sparked volatility across markets, fuelling fears of a global economic slowdown.

On a sectoral basis, performance for the MSCI Europe ex UK Index was mixed, with utilities (+8.1%) leading the pack, followed by energy (+5.8%) and financials (+3.8%). Conversely, consumer discretionary (-9.9%) was the worst-performing sector, with real estate (-8.0%) and information technology (6.3%) also among the larger fallers. 

The Fund’s top performer was Kongsberg Gruppen (+16%), the Norwegian defence company, which saw its share price rise on improving sentiment towards defence stocks.

Greek betting company OPAP (+11%) reported €2.3 billion in gross gambling revenue for 2024, driven by strong performance across both its betting and iGaming divisions. The company saw growth in four out of its five main business segments, with betting and iGaming posting double-digit gains.

Elsewhere, the Fund’s financial holdings continued to be a key contributor to performance, as the sector once again performed strongly over the month. The Fund’s bank positions – particularly CaixaBank (+9.9%), UniCredit (+6.4%), and Deutsche Bank (+8.5%) – were again among the top ten contributors.

Shares of Dutch payments firm Adyen (-17%) fell as investors took profits after the company’s strong full-year earnings report last month. Adyen had posted core earnings that exceeded market expectations and projected stronger net revenue growth along with continued margin expansion for 2025.

Logitech (-13%) shares declined despite the company forecasting fiscal year 2026 sales between $4.53 billion and $4.71 billion, signalling potential growth of 1% to 3%. The computer accessories maker also announced plans to repurchase $2 billion worth of shares over the next three years and will boost its current buyback program by an additional $600 million. The update came as the company reaffirmed its 2025 outlook.

Positive contributors to performance included:

Kongsberg Gruppen (+16%), OPAP (+11%) and Caixabank (+9.9%)

Negative contributors to performance included:

Adyen (-16%), Pandora (-13%) and Logitech International (-13%

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

*Source: Financial Express, as at 31.03.25, 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 31.03.24, 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.

The Funds managed by the Cashflow Solution team:

• May hold overseas investments that 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 a 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.
• May, under certain circumstances, invest in derivatives, but it is not intended that their use will materially affect volatility. Derivatives are used to protect against currencies, credit and interest rate moves or for investment purposes. There is a risk that losses could be made on derivative positions or that the counterparties could fail to complete on transactions. The use of derivatives may create leverage or gearing resulting in potentially greater volatility or fluctuations in the net asset value of the Fund. A relatively small movement in the value of a derivative's underlying investment may have a larger impact, positive or negative, on the value of a fund than if the underlying investment was held instead. The use of derivative contracts may help us to control Fund volatility in both up and down markets by hedging against the general market.
• The use of derivative instruments that may result in higher cash levels. Cash may be deposited with several credit counterparties (e.g. international banks) or in short-dated bonds. A credit risk arises should one or more of these counterparties be unable to return the deposited cash.
• 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, 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.
• May target an absolute return. There is no guarantee that an absolute return will be generated over the time period stated in the fund objective or any other time period.

The risks detailed above are reflective of the full range of Funds managed by the Cashflow Solution team and not all of the risks listed are applicable to each individual Fund. For the risks associated with an individual Fund, please refer to its Key Investor Information Document (KIID)/PRIIP KID.

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.com 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.