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Liontrust Special Situations Fund

October 2021 review
Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.

The Liontrust Special Situations Fund returned 0.6%* in October. The FTSE All-Share Index comparator benchmark returned 1.8% and the average return in the IA UK All Companies sector, also a comparator benchmark, was 0.3%.


Supply chain bottlenecks and inflationary pressures remained on the agenda through the month but equity markets drifted higher as investors wait to see what action central bankers might take. The MSCI World Index of developed markets notched up a 3.9% gain, while the FTSE All-Share rose 1.8% - a gain led by the 2.2% rise in the FTSE100.


A couple of the Fund’s largest risers were driven by upgrades to earnings guidance within Q3 updates. Robert Walters (+16%) said that it now expects 2021 profits to be “comfortably” ahead of the level predicted within interim results. Group net fee income rose 32% year-on-year in Q3, with Asia Pacific the strongest area – up 54% despite many of its markets being under some form of significant lockdown. The region has grown to now account for 48% of group fee income. Bunzl (+10%) upgraded full-year guidance to “slight” underlying revenue growth. It generated 2.5% underlying revenue growth in Q3, as 12% growth in the base business offset a 9.4% drop in its best-selling Covid-19 related products. Bunzl provides outsourced procurement and distribution of essential everyday items that are not for resale such as packaging, labels, cleaning & hygiene products and personal protection equipment. We own the shares for the strength of its distribution network. Better-than-expected Q3 cost control at GlaxoSmithKline (+7.5%) allowed it to raise adjusted EPS growth guidance (excluding Covid-19 solutions) to between -2% and -4%, up from a mid-to-high single digit decline. Covid-19 solutions are expected to contribute 7% to 9% this year.


Future (-4.4%) also upgraded 2021 guidance – to the top end of analysts’ expectations, driven by momentum in digital advertising. Shares in the company have performed very well since the release of results in May, and they gave back some ground in October despite the upgrade.


Elsewhere, a handful of the Fund’s financial services holdings moved higher on solid quarterly updates on assets under management. Brooks Macdonald Group (+10%) stated that funds under management rose 2.2% to £16.8bn in the three months to 30 September; investment performance accounted for 140 basis points of the increase with the rest coming from net new business. Hargreaves Lansdown (+7.4%) also posted a solid rise in assets under administration, with new inflows and market movements contributing fairly equally to a £2.5bn increase in assets to £138bn. Integrafin Holdings (+10%) announced that funds under direction at its Transact platform had risen 3.6% to over £52bn. With the FTSE All-Share only rising 1.1% over the quarter, the majority of the increase was driven by positive net flows.


Mortgage Advice Bureau (+18%) recovered strongly from a late-September dip in its share price which accompanied the release of interim results. Last month’s profit-taking looked to have been driven by comments that activity had softened recently as the impact of the stamp duty holiday phases out. However, the company stated that this trend was expected and that its full-year financial guidance is unchanged.


The portfolio’s largest detractor was Iomart (-32%). It has been slow to adapt to the changing market environment in which it operates – notably the dramatic shift from private to public cloud, which was accelerated by the Covid crisis. It issued a profit warning in April and another in October, noting that customer churn remains higher than usual and revenues from hardware reselling and one-off consultancy have dropped. We actively continue to assess Iomart’s business prospects within the context of this shift.


A position was opened in specialist engineer IMI. The company designs, manufactures and services highly engineered products that control the precise movement of fluids. Its sources of Economic Advantage are its extensive intellectual property, where it has specialist knowledge in manufacturing valves used in some of the world’s harshest environments, and also its strong distribution channels, with operations in over 50 countries.


Positive contributors included:

Mortgage Advice Bureau (+18%), Robert Walters (+16%), Integrafin Holdings (+10%), GlaxoSmithKline (+7.5%) and Hargreaves Lansdown (+7.4%).


Negative contributors included:

Iomart (-32%), Big Technologies (-17%), Ideagen (-10%), Learning Technologies (-8.9%) and John Wood Group (-7.2%).


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







Liontrust Special Situations I Inc






FTSE All Share






IA UK All Companies













*Source: Financial Express, as at 31.10.21, total return (net of fees and income reinvested), bid-to-bid, institutional class.


**Source: Financial Express, as at 30.09.21, total return (net of fees and income reinvested), bid-to-bid, primary class.

Understand common financial words and terms See our glossary
Key Risks 
Past performance is not a guide to future performance. The value of an investment and the income generated from it can fall as well as rise and is not guaranteed. You may get back less than you originally invested. The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.
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. 


This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID), which provide full product details including investment charges and risks. These documents can be obtained, free of charge, from www.liontrust.co.uk or direct from Liontrust. Always research your own investments. If you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances. 
This 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. Examples of stocks are provided for general information only to demonstrate our investment philosophy. The investment being promoted is for units in a fund, not directly in the underlying assets. It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, forwarded, reproduced, divulged or otherwise distributed in any form whether by way of fax, email, oral or otherwise, in whole or in part without the express and prior written consent of Liontrust. Always research your own investments and if you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances. 

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