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- European equities moved higher in July, buoyed by easing trade tensions and encouraging earnings reports from select companies.
- A tough month for the short book weighed on Fund performance.
- Within the long book, Wartsila continued its strong momentum into July, boosted by a newly announced engine contract. eBay and Belimo also delivered robust performances.
- Long book detractors included Kongsberg Gruppen, which fell as Q2 results cited rising costs, lower cash reserves, and mixed order intake, and Betsson, which declined after Q2 figures missed expectations despite strong revenue and earnings growth.
The Fund’s A4 share class returned -1.7%* in euro terms in July. The Fund’s comparator benchmarks, the MSCI Europe Index and HFRX Equity Hedge EUR Index, returned 0.7% and 0.6% respectively.
European equities moved higher in July, buoyed by easing trade tensions and encouraging earnings reports. Gains were particularly notable in the energy (+4.9%) and financial (+4.8%) sectors, with the latter rising as a number of European banks reported solid quarterly performances.
Conversely, the information technology (-6.1%) sector lagged, weighed down by underwhelming earnings and cautious forward guidance from prominent European software and semiconductor firms.
Meanwhile, the European Central Bank maintained its benchmark interest rate at 2% during the month. President Christine Lagarde, speaking in June, had signalled that the current cycle of monetary policy easing was approaching its conclusion.
The Fund’s short book had a tough month, with a moderate negative contribution coming from a range of positions, most notably an electronic air taxi maker which rose significantly on the announcement of plans to expand operations, doubling production capacity.
The top long book performer in July was eBay (+26%) after the company delivered strong Q2 results and issued an optimistic outlook for the current quarter, driven by robust demand in both US and international markets.
Revenue climbed 6.1% year-over-year to $2.73 billion, beating estimates of $2.64 billion. Adjusted EPS increased 16% to $1.37, topping expectations of $1.30. Gross merchandise volume rose 6% to $19.51 billion, also above forecasts. For Q3, eBay projects revenue between $2.69 billion and $2.74 billion, exceeding the consensus estimate.
Finnish engineering specialist Wartsila (+21%) reported second-quarter orders that exceeded analyst expectations, boosted by a newly announced contract for 15 large Wartsila engines for a 282-megawatt U.S. data centre. Marine orders also performed strongly, surpassing consensus estimates.
Belimo (+19%), the Swiss manufacturer of heating, ventilation and air conditioning (HVAC) equipment, rose after reporting a 31% increase in first-half net income, driven by broad-based sales growth, improved margins, and strength in the data centre segment – most notably in the US and Canada.
Long book detractors included Kongsberg Gruppen (-19%), a leading aerospace and defense specialist, whose second-quarter results noted rising costs, a dip in cash reserves and mixed order intake across its divisions.
Swedish betting company Betsson (-17%) declined as Q2 figures fell short of market expectations, even as tit reported double-digit growth in both revenue and earnings.
Performance during the quarter was driven by continued strength in Latin America, a higher sportsbook margin of 9.5% (up from 8.6% in Q2 2024), and successful expansion into new markets. However, the Nordic region remained a drag on performance, with revenue falling 28.4% year-on-year to €33.9 million. This marked a continuation of recent trends and was attributed to scaled-back marketing investment across all countries in the region.
Shares in audio streaming platform Spotify Technology (-16%) fell despite exceeding expectations for subscriber and user growth in the second quarter. The company reported 276 million premium subscribers, up from 268 million in Q1 and above the forecast of 273 million. Monthly active users rose to 696 million from 678 million, also beating estimates of 689 million.
However, Spotify posted an unexpected quarterly loss of €86 million, compared to a €274 million profit a year earlier. The loss was driven by higher costs, including personnel and marketing expenses.
Discrete years' performance (%) to previous quarter-end**:
| Jun-25 | Jun-24 | Jun-23 | Jun-22 | Jun-21 |
Liontrust GF European Strategic Equity A4 Acc EUR | 6.7% | 14.7% | 3.1% | 31.7% | 36.9% |
MSCI Europe | 8.1% | 13.7% | 16.7% | -6.5% | 27.9% |
HFRX Equity Hedge EUR | 5.2% | 7.3% | 2.0% | -2.2% | 19.0% |
| Jun-20 | Jun-19 | Jun-18 | Jun-17 | Jun-16 |
Liontrust GF European Strategic Equity A4 Acc EUR | -15.5% | 2.5% | 3.0% | 5.3% | 2.9% |
MSCI Europe | -5.5% | 4.5% | 2.8% | 18.0% | -11.0% |
HFRX Equity Hedge EUR | -4.5% | -6.3% | 3.5% | 6.0% | -9.4% |
*Source: Financial Express, as at 31.07.25, total return (income reinvested and net of fees). **Source: Financial Express, as at 30.06.25, total return (income reinvested and net of fees). Investment decisions should not be based on short-term performance.
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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.
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- Credit Counterparty Risk: 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.
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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.
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