Fund Manager Focus – Anthony Cross, Liontrust UK Smaller Companies

The Liontrust UK Smaller Companies fund has been on our buy list since 2014 and has outperformed its peer group in every calendar year since. Anthony Cross took charge of the portfolio in 1998 and he has an impressive track record, returning 1,677.61% compared to 784.56% for the IA UK Smaller Companies sector average1 since he took over.

Cross believes companies that have ‘economic advantage’ characteristics stand a better chance of succeeding going forward than their competitors. The main criteria used when assessing companies are intellectual property, strong distribution channels and high levels of repeat business.

Although not immune from the pandemic-induced sell-off in the first quarter of 2020, the fund’s bias towards quality companies helped protect it better than its peers, meaning that the fund fell 22.36% in the first quarter, whilst the sector average lost 29.76%2. Despite the first-quarter fall, the fund returned a respectable 15.22% during 2020 as a whole, whereas the sector returned 6.21%3. This stark difference in fortunes highlights the benefits of taking a long term perspective and not panicking when presented with stressed market conditions.

One of the largest positive contributors and the fund’s biggest holding was IMImobile, which jumped 48% in December alone, after a takeover offer from Cisco. IMImobile has been a long-standing position in the fund and acquisitions have been a constant feature for the fund over many years.

By focusing on companies that possess economic advantages, we believe the Liontrust UK Smaller Companies is well placed to continue its enviable track record over the long-term.

The value of any investment and the income derived from it can fall as well as rise and investors may get back less than they initially invested. Past performance is not a guide to future performance of any fund or investment.

 

Source: Financial Express Analytics, Total Return, Bid to Bid, GBP£,
108.01.1998 to 18.01.2021
201.01.2020 to 31.03.2020
301.01.2020 to 31.12.2020