Liontrust Special Situations I

Investment Process

The investment process focuses on companies that offer “Economic Advantage” - competitive strengths that allow them to sustain a higher than average level of profitability for longer than expected. The managers believe Economic Advantage is most durable in businesses with three categories of intangible assets: (1) Intellectual property; (2) Strong distribution channels; (3) Significant recurring business. Companies with durable Economic Advantage are also screened for the market’s appreciation of their potential earnings growth – the managers believe under-appreciated companies have the strongest potential for share price growth. This results in a portfolio of more dependable companies with less cyclicality. The investment style is not solely defensive - more cyclical stocks can be included, but banks, miners and retailers tend not to be represented. The fund is a dual priced unit trust so new investors will incur a small bid-offer spread on purchase.