Liontrust GF Global Alpha Long Short Fund

• Investor confidence returned in June amid easing trade tensions, calmer geopolitical environment and robust earnings.
• The S&P 500 ended June at a new all-time high after rising 5% over the month, although the dominance of the Magnificent Seven continued to wane as market leadership broadened out. US dollar weakness continued with the Dollar Index falling 10.7% in the first half of 2025 – the weakest performance since 1973 and the Bretton Woods agreement.
• European market returns were more sedate (+2.4%) but year-to-date returns continue to outshine the US.
• The Fund’s good monthly performance was led largely by its technology holdings.

The Liontrust GF Global Alpha Long Short Fund returned 3.6%* in US dollar terms in June, compared with the 0.4% return of the Secured Overnight Financing Rate reference benchmark and the 1.4% return of the HFRX Equity Hedge (USD) Index, also a reference benchmark.

Market backdrop

Global equity markets continued the positive May trajectory into June, led by the US as confidence returned amid easing trade tensions, calmer geopolitical environment and robust earnings. While the US market posted strong gains (+5.0%), positive performance also came from Europe (+2.5%), Japan (+1.6%), and emerging markets (+5.7%). Korea was especially strong, up 6% following a positive election outcome.

The US market performance moved beyond the Magnificent Seven dominance of recent years as the group’s performance has become more disparate: only two names – Nvidia and Meta – outperformed meaningfully in June whilst Apple and Tesla underperformed. In fact, Apple, Tesla and Alphabets year-to-date returns were a disappointing -18%, -21% and -7% respectively at the mid-point of the year.

Technology and communication services still led the performance table, confirming the broadening out of market leadership. Growth and technology stocks were boosted by the prospect of up to three rate cuts in the US before year end, driving longer-duration growth names to rally. The consumer staples sector was the laggard in the month, falling 2% as fears of tariffs impacting consumer confidence did not recede.

Although European market returns in June were more sedate, the year-to-date gain – 23% for the Eurostoxx 50 –has for once outshone the US, with Germany’s DAX rising a record breaking 35.9% in the first half of 2025.

Portfolio review

The Fund’s long book contributed 724bps to portfolio returns while the short book detracted 305bps.

Technology and financials led the long book, with the largest position, Seagate Technology (+23%), continuing to move higher following its successful analyst day. Coinbase (+42%) was also a strong contributor, benefitting from positive sentiment following the passing of the ‘Genius Act’ which was viewed as a significant milestone for the crypto industry.

The drag from the short book was broad based with no outliers to note. This was a pleasing performance overall given the backdrop of a strong equity market.

Portfolio changes

We trimmed the position in Seagate towards the end of the month given its significant rally but continue to own the name, viewing the fundamental story as compelling with a still undemanding valuation. 

We also initiated a position in Atlassian, a company we have owned in the past. Atlassian has enjoyed continued strong cloud migration and growth as well as making strong progress on its AI platform, which has become stickier, added more value, and extended its reach across every team in the enterprise. Our intrinsic valuation suggests over 30% upside to the current share price.

Given the easing of China/US trade tensions and a valuation still at a significant discount to global peers, we added to our position in leading EV carmaker BYD.

We also added an Indian holding – Eternal – increasing portfolio diversification into this high growth Indian quick commerce name.

The short book saw opportunistic rotations over the month but no significant changes across themes.

Outlook

Global geo-political risk is high, led by a US administration that is putting America first. This creates a backdrop that requires a much more careful assessment of risk versus reward. We believe that risk-adjusted returns will be front and centre of investors’ minds running through the second half of the year.

Thematically, we remain positive on the potential for AI to drive significant benefits across all industries and continue to work on identifying winners.

We have waited patiently for the crypto world to unfold and the IPO of Circle Internet could act as a Chat GPT moment for Stablecoins. This will benefit the entire blockchain/crypto supply chain and – together with fintech – remains a key theme for the rest of this year. 

Our base case is that equity markets globally remain little changed in the second half of the year, but that the polarisation of winners and losers will remain significant.  In this environment, overall market returns will be less important and, for the first time in many years, stock selection outside the very biggest companies in the world will matter, as will geographical diversification.

Source: FE Analytics, as at 30.06.25, total return, net of fees and income reinvested. *The Fund was launched on 24 January 2025 to receive the assets of GAM Star Alpha Technology, which was a sub-fund of GAM Star plc (“the merging fund”), which was very similar to the Fund. Because of the similarities between the merging fund and the Fund, the past performance of GAM Star Alpha Technology C Acc - EUR share class has been used for periods prior to the Fund’s launch date.