- In March, European financial markets were driven by a number of major global and regional events.
- Kongsberg Gruppen features prominently in top contributors, but overall long-book return is weighed down by a negative market environment.
- The Fund’s short exposure contributed positively, helping to offset some of the impact of a negative market performance.
The Fund’s A4 share class returned -3.7%* in euro terms in March. The Fund’s comparator benchmarks, the MSCI Europe Index and HFRX Equity Hedge EUR Index, returned -4.0% and -1.4% respectively.
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.
The portfolio’s long exposure proved to be a detractor to performance during the month, underperforming the benchmark return in challenging market conditions. In contrast, the short exposure (c.33% of NAV) contributed positively, helping to offset some of the losses.
The Fund’s top performer was Kongsberg Gruppen (+16%), the Norwegian defence company, which saw its share price rise as improving sentiment towards defence stocks provided a boost.
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 (+8.5%) and UniCredit (+5.1%) – were again among the top ten contributors.
Positive contributors from the Fund’s short book included a French luxury goods specialist which fell sharply following the surprise appointment of a new artistic director. A German sportswear company disappointed the market with softer-than-expected results and forecast another year of slow growth.
Long book detractors included 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.
Discrete years' performance (%) to previous quarter-end**:
|
|
Mar-25 |
Mar-24 |
Mar-23 |
Mar-22 |
Mar-21 |
|
Liontrust GF European Strategic Equity A4 Acc EUR |
6.3% |
15.4% |
7.6% |
28.9% |
28.2% |
|
MSCI Europe |
6.8% |
14.8% |
3.8% |
9.3% |
35.3% |
|
HFRX Equity Hedge EUR |
2.9% |
7.7% |
-4.6% |
7.9% |
22.3% |
|
|
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Liontrust GF European Strategic Equity A4 Acc EUR |
-13.9% |
4.2% |
0.3% |
10.7% |
-1.1% |
|
MSCI Europe |
-13.5% |
5.5% |
-0.4% |
16.9% |
-13.7% |
|
HFRX Equity Hedge EUR |
-11.3% |
-7.8% |
5.8% |
4.0% |
-8.2% |
*Source: Financial Express, as at 31.03.25, total return (income reinvested and net of fees).
**Source: Financial Express, as at 31.03.25, total return (income reinvested and net of fees). Investment decisions should not be based on short-term performance.
Key Features of the Liontrust GF European Strategic Equity Companies Fund
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Investment objective & policy1
|
The investment objective of the Fund is to achieve a positive absolute return over the long term for investors through a portfolio of long, synthetic long and synthetic short investments primarily in European equities and equity related derivatives. The Fund may invest anywhere in the world but will primarily invest in European companies either directly or via derivatives. The Fund may use financial derivative instruments for investment purposes and for efficient portfolio management (including hedging). The Fund will take both long and short positions in derivatives meaning the gross exposure of the Fund will typically be greater than 100% of the net asset value of the Fund. The Investment Adviser will alter the ratio of long and short exposures in the Fund depending on the Investment Adviser’s confidence in the investment process’ ability to generate returns from the short positions. Where sufficient short opportunities can be found, the Fund will have an approximately equal weighting in long and short positions. At other times, the Fund will have a net long position i.e. more long positions than short positions held in the Fund. Where investments are held in a currency other than the base currency, the exposure to currency risk may be minimised by hedging. The Fund expects to provide a positive absolute return under all market conditions over the medium to long term. However, there is no guarantee this will be achieved over this or any other time period. Income from the Fund's investments is reinvested. 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. |
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Recommended investment horizon |
5 years or more |
|
Risk profile (SRRI)2 |
4 |
|
Active/passive investment style |
Active |
|
Benchmark |
The Fund is considered to be actively managed in reference to MSCI Europe Index and the HFRX Equity Hedge (EUR) Index (the “Benchmarks”) by virtue of the fact that it uses the Benchmarks for performance comparison purposes. The Benchmarks are 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 Benchmarks. |
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.
