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View NowPast performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.
- Global equity markets lifted by speculation of looser US monetary policy
- French equities lag wider European shares on political uncertainty, while small caps underperform in August.
- Pandora shares fall on deceleration in Q2 jewellery sales; Balfour Beatty the pick of the Fund’s risers.
The Fund’s A3 share class returned -2.5%* in euro terms in August. This Fund’s target benchmark, the MSCI Europe Small Cap Index, returned -0.7%.
Global equity markets were buoyed by the prospect of US interest rate cuts as macroeconomic data pointed to some slowing in the labour market, while inflation rates are yet to show much impact from the imposition of Trump’s trade tariffs. At the same time, the US president’s move to challenge US Federal Reserve independence – putting pressure on Jay Powell to cut rates and attempting to sack governor Cook – fuelled further speculation around looser monetary policy.
The rise in the European market (MSCI Europe +1.2% in euro terms) was achieved despite a -0.9% return from France’s CAC40. The market fell towards the end of the month as French prime minister Francois Bayrou announced an unexpected confidence vote for September. Large caps led the rise in European markets, up 1.2% compared to the -0.7% performance of small caps.
Within the MSCI Europe Index, healthcare (+4.1%) was the strongest sector in euro terms, with consumer staples (+3.2%) and energy (+2.9%) also among the biggest risers. The weakest areas were IT (-1.9%), utilities (-1.7%) and industrials (-1.6%).
UK infrastructure group Balfour Beatty (+9.1%) reported a 7% increase in profits from operations from earnings-based businesses in the first half of 2025, as strong UK construction and support services offset a weaker performance from US construction. The company cited recent UK government commitments to major infrastructure projects as providing an opportunity to further enhance its order book which already stands at £19.5 billion.
Half-year revenues for Rotork (+6.4%) rose 3.3% in organic, constant currency terms to £367 million, with order intake rising 6.3% on the same basis to £391 million. The UK industrial engineering group highlighted that all divisions experienced good order growth against a volatile macro backdrop. The group maintained its 2025 outlook and reiterated that its balance sheet strength should support both share buybacks and bolt-on acquisitions.
Although Pandora (-19%) maintained its 2025 guidance of 7-8% organic growth and operating profit margins of around 24%, Q2 sales trends were soft enough to raise some concerns among investors. A quarterly trading update showed margins contracting to 19.4%, after a 230 basis point headwind from adverse moves in currency and commodity prices as well as the impact of tariffs. While quarterly organic growth was 8%, including 3% like-for-like and 5% store network expansion, this included a sales growth slowdown to 2% in July following a weak end of season sale.
Positive contributors to performance included:
Balfour Beatty (+9.1%), Rotork (+6.4%) and Bekaert (+5.9%).
Negative contributors to performance included:
Pandora (-19%), Atoss Software (-13%) and Mears Group (-12%).
Discrete years' performance (%) to previous quarter-end:
| Jun-25 | Jun-24 | Jun-23 | Jun-22 | Jun-21 |
Liontrust GF European Smaller Companies A3 Acc EUR | 12.9% | 14.5% | 9.0% | -9.9% | 59.6% |
MSCI Europe Small Cap | 12.2% | 12.0% | 6.7% | -17.7% | 43.1% |
| Jun-20 | Jun-19 | Jun-18 |
Liontrust GF European Smaller Companies A3 Acc EUR | -10.7% | -2.4% | 2.3% |
MSCI Europe Small Cap | -4.1% | -4.4% | 9.8% |
*Source: Financial Express, as at 30.08.25, total return (net of fees and income reinvested).
**Source: Financial Express, as at 30.06.25, total return (net of fees and income reinvested). Discrete data is not available for ten full 12-month periods due to the launch date of the portfolio (01.02.17). Investment decisions should not be based on short-term performance.
Key Features of the Liontrust GF European Smaller Companies Fund
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.
5 years or more.
5 (Please refer to the Fund KIID for further detail on how this is calculated)
Active.
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.
Understand common financial words and termsSee our glossary
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.
- The Fund, may in 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. 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.
- Credit Counterparty Risk: outside of normal conditions, the Fund 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.
- Concentration Risk: this 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.
- Smaller Companies Risk: as the Fund is primarily exposed to smaller companies there may be liquidity constraints 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. In addition the spread between the price you buy and sell units will reflect the less liquid nature of the underlying holdings.
- 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.
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.
