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Liontrust GF UK Growth Fund

March 2021 review

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise.

The Liontrust GF UK Growth Fund returned 4.0%* in March. The Fund’s comparator benchmark, the FTSE All-Share, returned 4.0%.


There was a firmer focus on a post-Covid world in February’s markets as the breakneck pace of the global vaccination effort saw the number of people vaccinated exceed the number of Covid cases. Specifically, investors began to price in a potential rise in inflation from pent-up demand being unleashed as lockdown restrictions ease. Further stoking inflationary concerns was the anticipation of a huge US fiscal stimulus bill, as President Biden’s US$1.9 trillion plan passed through the House of Representatives late in the month.


The promise of more stimulus and the vaccine rollout provided a boon for stockmarkets initially, before tailing off slightly as a sell-off in the sovereign bond market weighed on sentiment. For the Fund, the holdings that benefited most from the inflation trade were oil stocks Royal Dutch Shell (+10%), BP (+9.0%) and Petrofac (+9.3%) as oil prices climbed to their highest levels since January 2020. The area of relative weakness for the Fund was basic materials, where its only exposure is specialty chemicals company Synthomer (+6.9%). It was the best-performing sector, rising 11% in February, as base metal prices surged to multi-year highs.


There was also plenty of individual stock news: Aggreko’s (+37%) share price surged after it confirmed it had entered discussions with TDR Capital and I Squared Capital over a potential cash offer for the temporary power company. The quoted price was 880p per share, which represented a 39% premium to Aggreko’s shares on the day before the initial announcement that it had entered takeover talks.


Elsewhere, there were positive updates from Future (+12%) and Clipper Logistics (+10%), which both said they would beat consensus forecasts. The former is a platform for specialist media and it benefited from continued high levels of online engagement, which helped to drive strong growth in its Media division in the four months to 31 January 2021. As a result, it expects full-year profitability to be materially ahead of market expectations. Future also completed the acquisitions of GoCo Group and Mozo.


Leeds-based specialist in e-retail and returns management logistics Clipper Logistics won major contracts with River Island and Mountain Warehouse. The two contracts are expected to increase revenue by over £40m and enhance earnings in the company’s next financial year starting on 1 May 2021. It therefore expects to outperform the market’s expectations for its next financial year and beyond.


The biggest detractors this month were large-cap companies. Consumer goods giant Unilever (-11%) posted a decline in both sales and operating profit in 2020. Headline sales was impacted by adverse currency movements but volumes grew, driven by hand and home hygiene products, laundry and in-home food and refreshments. Underlying operating profit fell as margins shrank, a result of additional costs the company incurred to run its supply chain during the Covid-19 disruption.    


GlaxoSmithKline (-11%) said it plans to increase investment in its pipeline in 2021 and its Vaccines business will continue to be disrupted as governments focus more on Covid-19 vaccination programmes. As a result, the company forecasts an adjusted earnings-per-share decline of mid-to-high single digit percentage in 2021. In 2020, adjusted EPS declined 4% due to higher investment in R&D.


Hargreaves Lansdown’s (-11%) shares fell despite a fairly strong set of half-year results. The investment platform reported net new business of £3.2bn in the six months to 31 December 2020, significantly ahead of the consensus estimate of £2.1bn. The company commented that the age profile of its consumer base has fallen, as younger people take greater interest in investing. Assets under management rose 16% and pre-tax profit increased by 10%.


Catering company Compass Group (+11%) was the standout performer among the Fund’s large-cap stocks. It said organic revenue fell 34% year-on-year in the three months to December 2020 – the first quarter of its new financial year – but this was a slight improvement from the previous quarter and a significant improvement on the 44% decline in the quarter prior to that. Margins also materially improved, increasing to 2.7% in Q1, from 0.6% in the three months to September 2020.


Positive contributors included:

Aggreko (+37%), WH Smith (+25%), TP ICAP (+20%), Compass Group (+11%) and Royal Dutch Shell (+10%)


Negative contributors included:

Unilever (-11%), Hargreaves Lansdown (-11%), GlaxoSmithKline (-11%), Halma (-8.2%) and Pearson (-7.6%).


Discrete years' performance** (%), to previous quarter-end:






Liontrust GF Special Situations C3 Inst Acc GBP






FTSE All Share







*Source: Financial Express, as at 31.03.2021, total return (net of fees and income reinvested), sterling terms, C3 institutional class. Non fund-related return data sourced from Bloomberg.


**Source: Financial Express, as at 31.03.2021, total return (net of fees and income reinvested), primary class. Discrete data is not available for five full 12-month periods due to the launch date of the portfolio. Investment decisions should not be based on short-term performance.

Understand common financial words and terms See our glossary

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. Some of the Funds managed by the Economic Advantage team invest primarily in smaller companies and companies traded on the Alternative Investment Market.  These stocks may be less liquid and the price swings greater than those in, for example, larger companies. The performance of the GF UK Growth Fund may differ from the performance of the UK Growth Fund and will be lower than its corresponding Master Fund due to additional fees and expenses.


The information and opinions provided should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Always research your own investments and (if you are not a professional or a financial adviser) consult suitability with a regulated financial adviser before investing.

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