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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.
Key takeaways
- European equity markets experience a broad-based rally, with investor sentiment supported by the US-China trade deal, US rate cut, and ongoing AI investment.
- Broad-based nature of the rally provides a difficult environment for short book, as stocks with poor cash flow characteristics participated in the indiscriminate rally.
- Swedish telecoms group Ericsson and Finnish power equipment supplier Wartsila lead the long book’s gainers.
Performance
The Fund’s A4 share class returned 0.0%* in euro terms in October. The Fund’s comparator benchmarks, the MSCI Europe Index and HFRX Equity Hedge EUR Index, returned 2.6% and 0.5% respectively.
Commentary
Equity indices globally climbed to notch new all-time highs in October, aided by an easing of trade tensions between the US and China.
Ahead of a summit in South Korea, Trump had threatened a 100% import tariff on Chinese goods, while China had imposed export controls on rare earths minerals – a key component in the production of a range of goods including smartphones and electric vehicle batteries. The agreement of a one-year trade deal to avoid these restrictions sparked a significant relief rally.
Sentiment was also boosted by an interest rate cut from the US Federal Reserve – the second this year – as well as a number of new corporate commitments to boost AI investment.
This supportive environment allowed most areas of European markets to enjoy a broad-based rally. Utilities (+8.1% in sterling terms), IT (+7.1%) and energy (+6.7%) were the most buoyant sectors in October, with only communication services (-3.1%) recording a negative return.
From a style perspective, both MSCI Europe ex-UK Growth (+3.0%) and MSCI Europe ex-UK Value (+2.9%) participated fairly equally in the market rally.
The indiscriminate nature of the rally provided a difficult environment for the Fund’s short book (c.36% of Fund NAV), where losses broadly offset gains in the long book (c.114% NAV).
The short book continues to target companies with over-ambitious growth targets being backed by aggressive cash investments, but a number of these stocks rallied strongly within October’s rising market.
Large short book gainers included a US bitcoin miner which exploited AI enthusiasm by announcing plans to divert some activities towards data centre provision and an Italian luxury goods group whose Q3 sales surpassed expectations.
Within the Fund’s long book, Swedish telecoms group Ericsson (+24%) beat expectations with Q3 results, as profits came in around 10% ahead of consensus following cost-cutting efforts and operational efficiencies. With Ericsson commenting that improved gross margin levels of 48% should be maintained, analysts upgraded earnings forecasts for 2026.
Wartsila (+11%) continued its strong 2025 share price run as it released inline Q3 results. The supplier of power equipment in the marine and energy markets recorded 6% organic growth in order intake to 1.79 billion, while net sales were flat on the same basis at 1.63 billion euros.
A marginal Q3 revenue miss versus consensus expectations saw Technip Energies (-12%) shares weaken, giving up a portion of this year’s strong gains. The engineering specialist in energy, industrials and chemicals sectors confirmed full-year guidance and commented on a strong outlook with short-term prospects in LNG, decarbonisation and sustainable fuels.
Kongsberg Gruppen (-23%) provides technology to industries including defence, aerospace, marine and energy. Shares in the company slid through October, and a weakening cash flow profile prompted us to sell the position – completing the exit prior to a Q3 profit warning released on the 30th which caused the shares to take another leg lower.
Online marketplace eBay (-12%) lost some ground due to underwhelming Q4 guidance. Although gross merchandise volume rose 8% on a constant currency basis, eBay is forecasting this to slow to 4% - 6% in Q4.
Discrete years' performance (%) to previous quarter-end**:
| Sep-25 | Sep-24 | Sep-23 | Sep-22 | Sep-21 |
Liontrust GF European Strategic Equity A4 Acc EUR | 2.9% | 14.7% | 3.7% | 29.2% | 36.8% |
MSCI Europe | 9.3% | 18.8% | 19.2% | -11.0% | 28.8% |
HFRX Equity Hedge EUR | 6.6% | 9.5% | 2.5% | -4.0% | 16.5% |
| Sep-20 | Sep-19 | Sep-18 | Sep-17 | Sep-16 |
Liontrust GF European Strategic Equity A4 Acc EUR | -14.9% | 3.0% | 2.6% | 5.2% | 0.7% |
MSCI Europe | -7.8% | 5.7% | 1.5% | 16.3% | 1.8% |
HFRX Equity Hedge EUR | -2.4% | -3.5% | -1.1% | 5.8% | -1.3% |
*Source: Financial Express, as at 31.10.25, total return (income reinvested and net of fees).
**Source: Financial Express, as at 30.09.25, 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.
- The Fund will 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.
- 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.
- 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.
- Liquidity Risk: 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.
- 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.
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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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