Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. United Kingdom
  4. London Stock Exchange
  5. Liontrust Asset Management PLC
  6. News
  7. Summary
    LIO   GB0007388407

LIONTRUST ASSET MANAGEMENT PLC

(LIO)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Liontrust Asset Management : Gross exposure hits highest level since launch

09/30/2021 | 07:42am EST

We have pushed the Liontrust GF European Strategic Equity Fund's gross exposure to its highest level since the Fund took on its variable long/short investment strategy in 2014. This increase in gross market exposure is a direct reflection of the compelling investment opportunity we see in markets currently. Due to unprecedented levels of value dislocation in equity markets, this opportunity is equally attractive for both the long and short books.

The net market exposure is around 58% of the Fund net asset value (NAV), a fairly typical level for the Fund which reflects a cautiously constructive overall outlook we have for equities. But the gross book has hit 214% of NAV, comprising 136% long book positions and 78% short exposure.


This gross book size is a record for the Fund and we would expect such a large level to be a relatively infrequent occurrence in the future. It results from a very particular set of market circumstances: a large dispersion of share price valuations across the stockmarket which means we find large numbers of stocks we think are undervalued but also lots that we believe are too expensive.

If there was less valuation dispersion in markets, we'd likely be more unambiguously bullish or bearish, which would manifest itself in a lower gross book.

If we were bearish on markets, we would have a large exposure on the short side but a small long book, resulting in a low (or negative) net market exposure and lower gross exposure. If we were more bullish, we'd have a large long book and high net market exposure but few positions in the short book, meaning - again - a relatively low gross exposure.

The chart shows the Fund's positioning on four investment exposures since launch: long, short, net and gross. We can see that the upswing in gross exposure (grey) to above 200% from below 150% in the summer months was driven by a rise in the long exposure (green) and expansion in the short book (gold).


In the long book, one of the value dislocations we are looking to exploit is that which exists between growth and value stocks. The former typically trades on very high levels whilst the latter remains historically depressed despite some signs of better relative returns in late-2020/early-2021. After a decade of underperformance culminating in a capitulation during the initial Covid-19 market sell-off in early 2020, we think value stocks are primed for returns.

We explained recently that the increase in our short book was motivated bypockets of the market where aggressive corporate investment is worryingly high but share valuations are exorbitant.

With markets drifting steadily higher in recent months, the larger short book has been a headwind to Fund performance in absolute terms, but year to date our short positions have handily underperformed the market. At the same time, our long holdings have outperformed the market.

We are pleased there are early indications momentum is travelling in our direction, but the value dislocations are so great we believe there is significant performance potential in the current portfolio.

The value dislocations we observe today are by far the most extreme we have seen in our dataset which stretches back to the 1980s. Never have the valuations of unattractive stocks on our Cashflow Solution process - companies with poor cash flow control that are expensive and suffering poor business momentum - looked as expensive as they are today when compared to stocks the process finds attractive.

We know from our own empirical work across markets all over the world that the single most powerful forward predictor of factor performance is whether a factor is cheap or expensive relative to history. This suggests that there is now significant potential for the short book of the Fund to perform well in future months.

For a comprehensive list of common financial words and terms, see our glossary here.

Key Risks

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. Investment in Funds managed by the Cashflow Solution team involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The Liontrust European Growth Fund holds a concentrated portfolio of stocks, if the price of one of these stocks should move significantly, this may have a notable effect on the value of the respective portfolio. The Liontrust Global Income Fund's expenses are charged to capital. This has the effect of increasing dividends while constraining capital appreciation.

Disclaimer

The information and opinions provided 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. Always research your own investments and (if you are not a professional or a financial adviser) consult suitability with a regulated financial adviser before investing.

Thursday, September 30, 2021, 10:47 AM

Disclaimer

Liontrust Asset Management plc published this content on 30 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 September 2021 11:41:05 UTC.


ę Publicnow 2021
All news about LIONTRUST ASSET MANAGEMENT PLC
01/19TONY WOOD : UK Inflation Data Could Mean 'Substantial' Rate Increases
DJ
01/19Warabeya Nichiyo Sees Nine-Month Attributable Profit Surge 283%; Raises Year-End Divide..
MT
01/19FTSE 100 Edges Down as Inflation Soars
DJ
01/19BOE Seen Lifting Rates in February After Latest Inflation Data
DJ
01/19FTSE 100 to Open Lower as Inflation Pressures Mount
DJ
01/19Liontrust Asset Management Nine-Month Net Inflows, AUM Rise YoY
MT
01/19LIONTRUST ASSET MANAGEMENT : Directorate Change
PU
01/19LIONTRUST ASSET MANAGEMENT : Trading Update
PU
01/19Liontrust Asset Management plc Announces the Appointment Emma Howard Boyd CBE as A New ..
CI
01/11WATCH : Inflation, stagflation and deflation
PU
More news
Analyst Recommendations on LIONTRUST ASSET MANAGEMENT PLC
More recommendations
Financials
Sales 2022 228 M 309 M 309 M
Net income 2022 - - -
Net cash 2022 103 M 140 M 140 M
P/E ratio 2022 21,2x
Yield 2022 3,71%
Capitalization 1 050 M 1 433 M 1 425 M
EV / Sales 2022 4,16x
EV / Sales 2023 3,42x
Nbr of Employees 183
Free-Float 92,5%
Chart LIONTRUST ASSET MANAGEMENT PLC
Duration : Period :
Liontrust Asset Management PLC Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends LIONTRUST ASSET MANAGEMENT PLC
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 6
Last Close Price 1 730,00 GBX
Average target price 2 297,00 GBX
Spread / Average Target 32,8%
EPS Revisions
Managers and Directors
John Stephen Ions Chief Executive Officer & Executive Director
Vinay Kumar Abrol Chief Operating Officer, CFO & Executive Director
Alastair William Stewart Barbour Non-Executive Chairman
David Little Head-Technology
Martin Kearney Head-Compliance & Financial Crime
Sector and Competitors
1st jan.Capi. (M$)
LIONTRUST ASSET MANAGEMENT PLC-21.36%1 433
BLACKSTONE INC.-13.78%79 309
KKR & CO. INC.-9.96%39 242
LEGAL & GENERAL PLC0.71%24 270
THE CARLYLE GROUP INC.-7.65%18 073
AMUNDI0.28%16 699