Liontrust UK Smaller Companies Fund I Inc

UK Smaller Companies

Rated Fund 2014-2019. Targets companies with an 'economic advantage'

Managed by Anthony Cross and Julian Fosh, Liontrust UK Smaller Companies has beaten its benchmark over all recent time periods.

­The managers invest in companies in the FTSE Small Cap and Fledgling indices and the Alternative Investment Market and use an investment approach they call the “economic advantage”. ­ They believe that the secret to successful investing is to identify those few companies that have a durable economic advantage that allows them to sustain a higher-than-average level of profitability for longer than expected. ­ is should ultimately lead to strong share price appreciation.

Companies that make it into the portfolio are those with the strongest combination of economic advantage and under-appreciated potential for earnings growth. ­

The managers explain that economic advantage is the collection of distinctive characteristics of a company that competitors struggle to reproduce, even if those competitors have understood the benefits arising from those characteristics. To pass the economic advantage test, a company must demonstrate that it has intellectual property, strong distribution channels or significant recurring business.

Another key criterion is that the directors of the companies must own at least 3% of the listed equity. Cross and Fosh point out that in small companies such equity ownership motivates key employees, helps to secure a company’s competitive edge and leads to better corporate performance. ­

The fund typically comprises around 65 stocks. To limit risk a balance is maintained between industry sectors and company weightings in the portfolio are also controlled. Position sizes usually range from 1 to 3% with a maximum of 4%.

Narrative and ratings content all as of 01 January 2019.

See all Money Observer rated funds
Name
Liontrust UK Smaller Companies Fund I Inc
Manager
Liontrust Fund Partners LLP
Type
Unit Trust
ISIN
GB00B57TMD12
Sector
UK Smaller Companies
Launched
28/01/2013
OCF
1.4 %
Risk Rating
3
3 Year Sharpe
1.11
3 Year Alpha
9.03
Yield
0.3 %
Benchmark
FTSE Small Cap Ex Invest Trust TR GBP
The investment objective of Liontrust UK Smaller Companies Fund is to provide long-term (at least 5 years) capital growth by investing primarily in smaller UK companies displaying a high degree of Intellectual Capital and employee motivation through equity ownership in their business model. To achieve this aim, the Fund will invest in a portfolio of UK smaller companies’ shares, the majority of which are contained within the FTSE Small Cap., the FTSE Fledgling and the AIM indices. Companies within the Fund that graduate into the FTSE 250 Index will be held until a suitable replacement company is found. The Fund may also invest in transferable securities, money market instruments, warrants, cash and near cash and deposits. The Fund may also invest up to 10% of its property in units or shares in collective investment schemes. The Fund is permitted to use derivatives for the purposes of efficient portfolio management and for investment purposes.
Holding %
YouGov PLC 3.63 %
RWS Holdings PLC 2.94 %
Gamma Communications PLC 2.72 %
PayPoint PLC 2.66 %
dotDigital Group PLC 2.48 %
Learning Technologies Group PLC 2.48 %
Iomart Group PLC 2.28 %
GlobalData PLC 2.27 %
IMImobile PLC 2.16 %
Trifast PLC 2.13 %
Region %
United Kingdom 98.03 %
Sector %
Technology 33.03 %
Industrials 22.65 %
Financial Services 17.24 %
Consumer Cyclical 11.68 %
Healthcare 6.52 %
Name
Liontrust Fund Partners LLP
Address
NULL, London, United Kingdom
UCITS
Yes
Legal Structure
Unit Trust

Managers

Matthew Tonge
Joined 09/01/2015

Matthew Tonge joined the Liontrust trading desk in 2003 from Barclays Capital Asset Management, becoming a partner in 2011. Responsible for execution across all the firm’s assets, in 2014 he was voted Mid-Tier trader of the year by The Trade magazine for his work in mid and small cap stocks, the inaugural year of the award. Having worked closely with Anthony and Julian for many years, in September 2015 he joined the Economic Advantage team to help research and analyse companies across the small cap universe. Matt graduated from the University of Birmingham in 2000, with First Class Batchelor degrees in Manufacturing Engineering (BENG) & Commerce (BCOM), winning the Gilbert Walker Prize in Engineering and Economics as top student in his year.

Victoria Stevens
Joined 06/01/2015

Victoria Stevens joined the Economic Advantage team at Liontrust in June 2015 as a partner and fund manager to help research and analyse investment opportunities primarily across the small cap universe. She previously worked for almost 5 years at the growth company specialist broking and advisory firm finnCap Ltd, latterly as deputy head of corporate broking. Prior to joining finnCap, Victoria was a senior reporter and diary editor at the financial newspaper City AM, having studied Modern Languages at Oxford University.

Julian E C Fosh
Joined 06/02/2008

Julian Fosh joined Liontrust in 2008 from Saracen Fund Managers Ltd to co-manage the Liontrust UK Growth, Special Situations and UK Smaller Companies Funds with Anthony Cross and to develop the Liontrust Economic Advantage process. From 2004 to 2008, Julian was the co-manager of Saracen Growth Fund. Before this, Julian headed the investment department at Scottish Friendly Assurance Society Limited where he managed a range of funds including UK equity OEICs, life and pension funds. In a career that started in 1984, Julian has also worked at Britannia Investment Managers and Scottish Amicable. Julian graduated in 1984 from Merton College Oxford with an MA in Jurisprudence.

Anthony Cross
Joined 01/08/1998

Anthony Cross joined Liontrust in 1997, forming the Liontrust Economic Advantage process. This process was applied to the Liontrust UK Smaller Companies Fund from the start of 1998, Liontrust Special Situations Fund in 2005, Liontrust UK Growth Fund in 2009 and Liontrust UK Micro Cap Fund in 2016. Before moving to Liontrust, Anthony joined Schroder Investment Management as a graduate trainee, later becoming an equity analyst before joining the Smaller Companies team in 1994. Anthony Cross graduated in 1990 from Exeter University with a degree in Politics.

Data provided by Morningstar.

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