Liontrust UK Smaller Companies R

Invests in UK small cap companies, including AiM, with a bias to technology companies.

  • 1553.03p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • -
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 5.00% 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 1.50%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 1.63%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 0.00%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 13 December 2019, fund data last updated 28 November 2011

The fund’s objective is to provide long term capital growth by investing in UK smaller companies, companies progressing to the FTSE 250 are sold. Experienced managers Anthony Cross and Julian Fosh look particularly for companies with intellectual property that will enable them to deliver sustained above average profitability; as a result the fund often has a bias to technology shares. Share ownership by directors is also required of portfolio companies. Smaller companies’ shares can be more volatile and less liquid than larger company shares, so smaller companies funds can carry more risk.

Fund summary

Sector UK Smaller Companies
Structure UNIT TRUST
Launched August, 1995
Size £992m
Yield 0.00%
Charging basis Income
Dividends paid 30 Jun

Charges

Standard initial charge 5.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread -2.14%
Annual management charge 1.50%
Ongoing charges figure 1.63%

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Investment process

The fund invests in companies from the FTSE Small Cap and FTSE Fledgling indices and the AiM market – companies progressing to the FTSE 250 are typically sold. The managers target companies with what they call “Economic Advantage” – characteristics their competitors will struggle to replicate. These typically fall into three categories: (1)Intellectual property; (2)Strong distribution channels; (3)Significant recurring business. The managers believe that company profits revert to the mean over time, and that only companies with Economic Advantage can defy this and sustain above average profits over the long term. Though the managers look for businesses capable of growing over the long term, they recognise that economic cycles can interrupt their growth. Such companies can be overlooked by the market, so they also look for companies with underappreciated potential earnings growth. They believe that they will surprise the market with strong growth, delivering an uplift in the share price. The managers also require directors’ share ownership of at least 3%, believing this helps to align their interests with outside shareholders.

Anthony Cross now has a successful track record dating back to 1998 on this fund, and since 2008 has benefited from the input of co-manager Julian Fosh. Previously known as Liontrust Intellectual Capital, the fund’s name was changed in 2010 but intellectual property remains a favoured characteristic in investments and the fund typically has a large weighting to technology shares. Historically the fund has proved resilient in falling markets, though the distinct investment style has also led to periods of underperformance relative to the peer group.

Manager research

Average monthly relative returns

  • 14/15 0.56%
  • 15/16 0.55%
  • 16/17 0.01%
  • 17/18 0.37%
  • 18/19 0.02%

Bestinvest MRI

  • 3 years 0.13%
  • 5 years 0.30%
  • Career 0.41%
  • 3 years 86.20%
  • 5 years 99.80%
  • Career 100.00%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Anthony Cross / Julian Fosh

•Cross graduated in 1990 with a degree in politics from Exeter University and began his investment career at Schroders. In 1994 he became a member of their smaller companies team where he assisted Andy Brough with the Schroder UK Smaller Companies fund. In September 1997 he joined Liontrust. •Fosh has an MA in Jurisprudence from Merton College Oxford and began his career with Scottish Amicable Investment Managers in 1984. In 1997 he briefly joined Britannia Investment Managers, moving onto the Scottish Friendly Assurance Society Ltd in the same year where he managed a range of funds including UK equity OEICs, life and pension funds. In 2004 he joined Saracen to aid in the management of their Growth fund. In June 2008 he moved to Liontrust.

Track record

Anthony Cross / Julian Fosh has 11.3 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.41%. During the worst period of relative performance (from September 2008 - December 2008) there was a decline of 6% relative to the index. The worst absolute loss has been 29%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is more than 99%.

Periods of worst performance

Absolute -29.00% (June 2008 - February 2009)
Relative -6.00% (September 2008 - December 2008)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 31 August 2019

3.825% Yougov
2.8478% Rws Hldgs
2.7006% Paypoint
2.6925% Gamma Communications Plc
2.4114% Trifast
2.4099% Iomart Group
2.2511% Imimobile Plc
2.2116% Dotdigital Group Plc
2.1556% Globaldata Plc
2.0573% Robert Walters
Source: Trustnet

Sector breakdown

Industrials 27.00%
Technology 23.00%
Financials 16.00%
Health Care 8.00%
Consumer Services 8.00%
Consumer Goods 7.00%
Money Market 6.00%
Telecommunications 3.00%
Basic Materials 1.00%

Portfolio

50 - 80 stocks (up from 40-50 as the assets grew).

Constraints

Sector weights must be within 50% of the FTSE Small Cap index weight.

Key Investor Information

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