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Liontrust calls time on European Absolute Return fund

Liontrust is looking at options to close or merge away James Inglis-Jones’s underperforming European Absolute Return fund due to its small size.

The long/short equity product was launched in July 2009 and has lost 10 per cent since launch to January 28, according to FE Analytics.

A spokesperson for Liontrust said no decision had been made as to what would happen to the fund, but its £2m size meant it was “not economical” to run.

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The European Absolute Return fund is run using Mr Inglis-Jones’s “cashflow solution” process, which involves balance sheet analysis to identify companies with the strongest cashflows which can then generate consistent returns.

The process has helped the Liontrust European Growth fund, run by Mr Inglis-Jones and Samantha Gleave, to outperform in the longer term, but the addition of a short book of companies with weak cashflow proved less successful.

The absolute return fund was removed from Hargreaves Lansdown’s Wealth 150 buy list a year ago following lacklustre performance, and posted the worst performance in the IMA Targeted Absolute Return sector in 2012 and 2013.