View the latest insights from the Cashflow Solution Team
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 equities rise but AI concerns continue to influence sector performance.
- ArcelorMittal rose on better-than-expected quarterly earnings, with investors in Eiffage and Novartis also responding positively to results.
- Online travel agency Booking Holdings sold off as it was caught up amid wider fears over the potential for AI tools to threaten a range of businesses, particularly those providing software or online tools.
Performance
The Fund’s A5 share class returned 1.7%* in euro terms in February. This Fund’s target benchmark, the MSCI Europe Index, returned 4.1%.
Commentary
European equity markets registered gains in February despite ongoing concerns around the impact of AI on certain sectors, as well as a spike in geopolitical risk at the end of the month as the US and Israel launched attacks on Iran.
Software and professional services firms were among those in focus due to the potential for AI tools to undermine their core businesses. At the same time, investors continued to show some nervousness over the scale of capital investment from the biggest AI players.
Most sectors of the MSCI Europe Index were in positive territory in euro terms, although there was a large range of dispersion between the largest gainers, defensive areas including communication services (+10%) and consumer staples (+9.5%) and the more cyclical laggards such as financials (-0.1%) and consumer discretionary (+1.5%). Real estate (+10.8%) was also a notable gainer.
Steel producer ArcelorMittal (+21%) beat analyst estimates with its Q4 EBITDA of $6.5 billion, equivalent to $121 per tonne. Investors were also encouraged by a 2026 outlook which predicts a 2% increase in global ex-China demand growth, as well as highlighting the potential for ArcelorMittal to benefit from greater domestic European production as trade tariffs reduce the attractiveness of imports. Following strong cash generation, the company announced a 9% dividend increase and committed to returning 50% of free cash flow via share buybacks.
Shares in French construction and concessions group Eiffage (+19%) rallied ahead of 2025 results which showed a 4.8% like-for-like revenue increase to over €25 billion. Over the next year, Eiffage expects revenue growth to slow but operating profit to benefit from improved margins.
This year’s strong momentum in Novartis (+15%) shares was maintained by 2025 results which detailed 8% net sales growth and a 14% improvement in core operating income. The pharma group is facing a transitional year with the largest patent expiry schedule in its history but still expects to deliver low single-digit growth in revenues and profit.
Online travel agency Booking Holdings (-15%) sold off amid wider fears over the potential for AI tools to threaten a range of businesses, particularly those providing software or online tools. The company itself reported 9% growth in room nights in Q4, lifting revenue 11% in constant currency terms. While acknowledging the accelerating pace of change in the travel industry, Booking emphasised the opportunity to deploy generative AI itself and issued an upbeat 2026 outlook of high single digit growth in both bookings and revenues.
Swiss building materials group Holcim (-8.9%) lost some ground on speculation that the EU could delay plans to withdraw carbon allowances. This measure had been expected to reduce supply and improve market dynamics for major players, such as Holcim, that can comply with decarbonisation regulations.
Positive contributors to performance included:
ArcelorMittal (+21%), Eiffage (+17%) and Novartis (+15%).
Negative contributors to performance included:
Booking Holdings (-15%), Holcim (-10%) and Deutsche Bank (-9.0%).
Discrete years' performance (%) to previous quarter-end**:
| Dec-25 |
Liontrust GF Pan-European Dynamic Fund A5 | 19.7% |
MSCI Europe | 19.4% |
*Source: Financial Express, as at 28.02.26, total return (net of fees and income reinvested), A5 class.
**Source: Financial Express, as at 31.12.25, total return (net of fees and income reinvested), bid-to-bid, A5 class. Discrete data is not available for ten full 12-month periods due to the launch date of the portfolio (27.02.24). Investment decisions should not be based on short-term performance.
Key Features of the Liontrust GF Pan-European Dynamic Fund
The investment objective of the Fund is to achieve capital growth over the long-term by predominantly investing in a portfolio of European equities. The Investment Adviser will seek to achieve the investment objective of the Fund through investment of at least 80% of the Fund’s Net Asset Value in companies which are incorporated, domiciled, listed or conduct significant business in Europe (the EEA, Switzerland and the UK). The Fund will not be restricted in its choice of investment by either size or sector.
The Fund is considered to be actively managed in reference to MSCI Europe Index (the “Benchmark”) by virtue of the fact that it uses the Benchmark for performance comparison purposes and for certain Performance Fee Share Classes, to calculate performance fees. 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 Benchmarks.
The Fund is not expected to have any exposure to financial derivative instruments in normal circumstances, but the Investment Adviser may on occasion, where it deems it appropriate in seeking to achieve the investment objective of the Fund, use financial derivative instruments listed on a recognised exchange or traded on an organised market or financial derivative instruments traded over-the-counter for investment purposes, efficient portfolio management, and hedging purposes.
In addition, the Fund may invest in exchange traded funds and other eligible open-ended collective investment schemes. No more than 10% of the net assets of the Fund will be invested in aggregate in open-ended collective investment schemes. The Fund may invest in closed-ended funds that qualify as transferable securities. Investment in closed-ended funds is not expected to comprise a significant portion of the Fund’s net assets and will not typically exceed 10% of net assets.
For liquidity or cash management purposes, a proportion of the Fund may also be invested in debt securities including government and corporate bonds, Money Market Instruments, cash and near cash and deposits. Any investment in bonds will be in investment grade corporate and government fixed or floating rate instruments.
5 years or more (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 Net Total Return EUR 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.
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.
- 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.
- Liquidty 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.
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.
