View the latest insights from the Global Equities team.
View Now- Investor confidence returned in June amid easing trade tensions, calmer geopolitical environment and robust earnings.
- The S&P 500 ended June at a new all-time high after rising 5% over the month, although the dominance of the Magnificent Seven continued to wane as market leadership broadened out. US dollar weakness continued with the Dollar Index falling 10.7% in the first half of 2025 – the weakest performance since 1973 and the Bretton Woods agreement.
- European market returns were more sedate (+2.4%) but year-to-date returns continue to outshine the US.
- The Fund’s good monthly performance was led largely by its technology holdings.
The Liontrust GF Global Alpha Long Short Fund returned 3.6%* in US dollar terms in June, compared with the 0.4% return of the Secured Overnight Financing Rate reference benchmark and the 1.4% return of the HFRX Equity Hedge (USD) Index, also a reference benchmark.
Market backdrop
Global equity markets continued the positive May trajectory into June, led by the US as confidence returned amid easing trade tensions, calmer geopolitical environment and robust earnings. While the US market posted strong gains (+5.0%), positive performance also came from Europe (+2.5%), Japan (+1.6%), and emerging markets (+5.7%). Korea was especially strong, up 6% following a positive election outcome.
The US market performance moved beyond the Magnificent Seven dominance of recent years as the group’s performance has become more disparate: only two names – Nvidia and Meta – outperformed meaningfully in June whilst Apple and Tesla underperformed. In fact, Apple, Tesla and Alphabets year-to-date returns were a disappointing -18%, -21% and -7% respectively at the mid-point of the year.
Technology and communication services still led the performance table, confirming the broadening out of market leadership. Growth and technology stocks were boosted by the prospect of up to three rate cuts in the US before year end, driving longer-duration growth names to rally. The consumer staples sector was the laggard in the month, falling 2% as fears of tariffs impacting consumer confidence did not recede.
Although European market returns in June were more sedate, the year-to-date gain – 23% for the Eurostoxx 50 –has for once outshone the US, with Germany’s DAX rising a record breaking 35.9% in the first half of 2025.
Portfolio review
The Fund’s long book contributed 724bps to portfolio returns while the short book detracted 305bps.
Technology and financials led the long book, with the largest position, Seagate Technology (+23%), continuing to move higher following its successful analyst day. Coinbase (+42%) was also a strong contributor, benefitting from positive sentiment following the passing of the ‘Genius Act’ which was viewed as a significant milestone for the crypto industry.
The drag from the short book was broad based with no outliers to note. This was a pleasing performance overall given the backdrop of a strong equity market.
Portfolio changes
We trimmed the position in Seagate towards the end of the month given its significant rally but continue to own the name, viewing the fundamental story as compelling with a still undemanding valuation.
We also initiated a position in Atlassian, a company we have owned in the past. Atlassian has enjoyed continued strong cloud migration and growth as well as making strong progress on its AI platform, which has become stickier, added more value, and extended its reach across every team in the enterprise. Our intrinsic valuation suggests over 30% upside to the current share price.
Given the easing of China/US trade tensions and a valuation still at a significant discount to global peers, we added to our position in leading EV carmaker BYD.
We also added an Indian holding – Eternal – increasing portfolio diversification into this high growth Indian quick commerce name.
The short book saw opportunistic rotations over the month but no significant changes across themes.
Outlook
Global geo-political risk is high, led by a US administration that is putting America first. This creates a backdrop that requires a much more careful assessment of risk versus reward. We believe that risk-adjusted returns will be front and centre of investors’ minds running through the second half of the year.
Thematically, we remain positive on the potential for AI to drive significant benefits across all industries and continue to work on identifying winners.
We have waited patiently for the crypto world to unfold and the IPO of Circle Internet could act as a Chat GPT moment for Stablecoins. This will benefit the entire blockchain/crypto supply chain and – together with fintech – remains a key theme for the rest of this year.
Our base case is that equity markets globally remain little changed in the second half of the year, but that the polarisation of winners and losers will remain significant. In this environment, overall market returns will be less important and, for the first time in many years, stock selection outside the very biggest companies in the world will matter, as will geographical diversification.
Discrete years' performance (%)* to previous quarter-end:
| Jun-25 | Jun-24 | Jun-23 | Jun-22 | Jun-21 |
Liontrust GF Global Alpha Long Short B8 Acc USD | 13.6% | 20.1% | -10.2% | -3.5% | 45.8% |
FRB of New York Secured Overnight Financial Rate | 4.7% | 5.3% | 3.8% | 0.2% | |
HFRX Equity Hedge | 7.0% | 9.1% | 4.6% | -0.9% | 20.4% |
Source: FE Analytics, as at 30.06.25, total return, net of fees and income reinvested. *The Fund was launched on 24 January 2025 to receive the assets of GAM Star Alpha Technology, which was a sub-fund of GAM Star plc (“the merging fund”), which was very similar to the Fund. Because of the similarities between the merging fund and the Fund, the past performance of GAM Star Alpha Technology C Acc - EUR share class has been used for periods prior to the Fund’s launch date.
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 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.
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. The Fund can invest in derivatives. Derivatives are used to protect against currency, credit or 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 Fund uses derivative instruments that may result in higher cash levels. Outside of normal conditions, the Fund may choose to hold higher levels of cash. Cash may be deposited with several credit counterparties (e.g. international banks) or in shortdated bonds. A credit risk arises should one or more of these counterparties be unable to return the deposited cash. The Fund’s volatility limits are calculated using the Value at Risk (VaR) methodology. In high interest rate environments the Fund’s implied volatility limits may rise resulting in a higher risk indicator score. The higher score does not necessarily mean the Fund is more risky and is potentially a result of overall market conditions. The Fund may invest in emerging markets which carries a higher risk than investment in more developed countries. This may result in higher volatility and larger drops in the value of the fund over the short term. Certain countries, including China, have a higher risk of the imposition of financial and economic sanctions on them which may have a significant economic impact on any company operating, or based, in these countries and their ability to trade as normal. Any such sanctions may cause the value of the investments in the fund to fall significantly and may result in liquidity issues which could prevent the fund from meeting redemptions. The Fund may invest in smaller companies and may invest a small proportion (less than 10%) of the Fund in unlisted securities. There may be liquidity constraints in these securities 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. 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. There is no guarantee that an absolute return will be generated over any time period. The Fund may have 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. ESG Risk: there may be limitations to the availability, completeness or accuracy of ESG information from third-party providers, or inconsistencies in the consideration of ESG factors across different third party data providers, given the evolving nature of ESG. Investors in share classes with a performance fee will pay a variable performance fee amount that is based on the performance of the underlying share class, which is likely to result in different total fees being charged each year and, during periods of outperformance, higher total fees than that of a share class with no performance fee. A performance fee may be payable in case the share class has outperformed its benchmark but had a negative performance.
Disclaimer
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.
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