- In March, European financial markets were driven by a number of major global and regional events.
- Swedish accounting software provider Fortnox rallied after a joint cash takeover offer from top shareholder First Kraft and PE firm EQT.
- 4imprint, Pandora and Hemnet were among the detractors.
The Fund’s A3 share class returned -2.7%* in euro terms in February. This Fund’s target benchmark, the MSCI Europe Small Cap Index, returned -3.2%.
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 Index was mixed, with utilities (+5.5%) leading the pack, followed by energy (+3.6%) and financials (+1.1%). Conversely, consumer discretionary (-10.6%) was the worst-performing sector, with information technology (-7.5%) and real estate (-6.4%) also among the larger fallers.
Shares in Swedish accounting software provider Fortnox (+30%) surged on the final trading day of the month following news that its largest shareholder, First Kraft, together with private equity firm EQT, had submitted a joint cash takeover offer. The proposed price of 90 kronor per share reflects a 38% premium over Fortnox’s closing share price on 28 March.
German telecommunications and web content provider Freenet (+12%) rose on well-received Q4 results. The company rose despite EBITDA missing market expectations, due to restructuring costs. The German telecom provider showed solid operational progress through growth in its Waipu TV segment and contract mobile subscribers, and issued 2025 guidance broadly in line with expectations.
BankInter (+9.8%) was again among the top contributors, benefiting from the financials sector’s continued strong year-to-date performance, maintaining strong momentum after a positive earnings report released in January.
Shares in marketer of promotional merchandise 4imprint (-26%) fell sharply after issuing cautious guidance. In the first two months of 2025, order intake was slightly lower compared to the same period in 2024, reflecting ongoing market uncertainty. The potential impact of trade tariffs also casts a shadow across the demand outlook for the rest of the year.
Positive contributors to performance included:
Fortnox (+30%), Freenet (+12%) and Bankinter (+9.8%)
Negative contributors to performance included:
4imprint (-30%), Pandora (-15%) and Hemnet (-15%)
Discrete years' performance (%) to previous quarter-end:
|
|
Mar-25 |
Mar-24 |
Mar-23 |
Mar-22 |
Mar-21 |
|
Liontrust GF European Smaller Companies A3 Acc EUR |
2.7% |
16.4% |
-2.6% |
7.9% |
70.2% |
|
MSCI Europe Small Cap |
3.4% |
10.2% |
-9.1% |
1.9% |
61.2% |
|
|
Mar-20 |
Mar-19 |
Mar-18 |
|
Liontrust GF European Smaller Companies A3 Acc EUR |
-21.6% |
-2.3% |
-1.2% |
|
MSCI Europe Small Cap |
-18.1% |
-1.3% |
8.3% |
|
Investment objective & policy1
|
The investment objective of the Fund is to achieve long term capital growth by investing primarily in European smaller companies. The Fund may invest in all economic sectors in all parts of the world, although it is intended it will invest primarily in equities and equity related derivatives (i.e. total return swaps, futures and embedded derivatives) in European companies (including the UK and Switzerland). The majority of the assets of the Fund (more than 85%) are expected to be invested in smaller companies (with a market capitalisation of less than 5 billion euros at the time of the initial investment). In normal conditions, the Fund will aim to hold a diversified portfolio, although at times the Investment Adviser may decide to hold a more concentrated portfolio, and it is possible that a substantial portion of the Fund could be invested in cash or cash equivalents. The Fund may use FX forwards to hedge the Fund’s currency exposures. The Fund has both Hedged and Unhedged share classes available. The Hedged share classes use forward foreign exchange contracts to protect returns in the base currency of the Fund. |
|
Recommended investment horizon |
5 years or more |
|
Risk profile (SRRI)2 |
6 |
|
Active/passive investment style |
Active |
|
Benchmark |
The Fund is considered to be actively managed in reference to MSCI Europe Small -Cap Index net total return (the “Benchmark”) by virtue of the fact that it seeks to outperform the Benchmark. However the Benchmark is not used to define the portfolio composition of the Fund and the Fund may be wholly invested in securities which are not constituents of the Benchmark. |
Notes: 1. As specified in the PRIIP KID of the fund; 2. SRI = Summary Risk Indicator. Please refer to the PRIIP KID for further detail on how this is calculated.
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.
