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Liontrust GF UK Growth Fund

November 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 GF UK Growth Fund returned -3.1%* in November. The Fund’s comparator benchmark, the FTSE All-Share, returned -2.2%.


The FTSE All-Share was trading fairly flat for November and not far from 2020’s highs heading into the last few days of the month, but the identification of the Omicron variant of Covid-19 triggered a sharp drop. Until that point, the market narrative had largely remained centred on the inflationary forces generated by economic recovery from the last two years’ lockdown measures. However, the prospect of a fresh surge in the pandemic sent shares lower, particularly those exposed to any potential public health measures that restrict social contact and travel. Travel & Leisure (-18%) was, unsurprisingly, the weakest sector in the FTSE All-Share Index.


While high street and transport hub retailer WH Smith (-15%) was a large portfolio detractor, the Fund has relatively low exposure to the businesses that are most affected by such restrictions. The Fund’s worst performing holdings in November predominantly reflected stock-specific setbacks. For example, TP ICAP (-18%) fell after the performance of its new Liquidnet unit disappointed investors. Q3 growth of 16% in its Energy & Commodities division was the highlight for the interdealer broker as it indicated a 3% year-on-year decline in revenues. Including revenues from the acquired Liquidnet business boosted total growth to 15%. Although TP ICAP says Liquidnet’s integration is going well, with cost synergies being realised ahead of expectations, revenues are now expected to be at the lower end of the £160m - £180m range previously given. Lower equity market volumes in October were blamed.


TI Fluid Systems (-17%) dropped on news of an institutional investor selling a large stake. Bain Capital sold 40 million shares in a placing at 250p, a 9% discount, taking its stake in the company down from 44% to 37%. Shares in TI Fluid Systems had proven resilient to a Q3 update earlier in the month that showed revenues fell heavily – down 15% but not by as much as the 20% drop in global light vehicle production volumes. TI Fluid Systems makes highly engineered automotive fluid systems. The car industry has been hit by microchip shortages and supply chain problems; TI Fluid Systems is cutting costs in light of the market disruption.


Among the portfolio risers, the highlight was Sage Group (+8.6%), which pushed ahead after full-year results showed promising trends. While reported revenue fell 3% to £1.85bn and operating profit dropped 8% to £373m, there were signs that the company’s strategic investments are paying off through higher recurring and cloud revenues. Annualised recurring revenue rose 8% to £1.68bn as its Sage Business Cloud product grew 19% to £997m. Subscriptions now account for 70% of revenues, up from 65% last year, while the customer renewal rate remains steady at 99%. The company has invested in accelerating the roll-out of Sage Business Cloud, pushing operating margins down 1.1 percentage points to 20.2%, but Sage expects this to recover in 2022.


A trading update from quality assurance provider Intertek Group (+9.1%) revealed robust sales growth and progression in margins. Between July and October, it grew revenues 6.7% year-on-year, while cost control and operational leverage have benefitted its profit margin. The company suggests that supply chain disruption and the growth of sustainable considerations are both trends which are likely to drive demand for its quality, safety and sustainability assurance services.


Smiths Group (+6.4%) also performed well on evidence of solid trading. Revenues in the three months to 31 October 2021 were up 1% on an underlying basis as the majority of its divisions benefitted from a pickup in client demand. The one laggard was Smiths Detection, a unit providing screening and safety services at airports, ports and other locations. Smiths Group expects underlying growth this year to return to pre-Covid levels of around 3%.


Shares in Paypoint (-13%) fell sharply ahead of the outcome of an Ofgem investigation and the release of its interim results. Ofgem announced that it would accept Paypoint’s proposal to remove exclusivity clauses from current and future contracts and make a £12.5m donation. The convenience store payments and e-commerce specialist grew interim revenues by 21% to £56m in the six months to 30 September, while adjusted pre-tax profit grew 30% to £22m. 


WH Smith (-15%) issued full-year results during November, but they weren’t responsible for its share weakness. In the three months to 31 August – its Q4 revenues hit 71% of 2019’s pre-Covid levels; in the first nine weeks of its new financial year, this metric has crept up to 82%, giving the company confidence of returning to profit in 2022. However, the emergence of Omicron sent the shares lower.


Positive contributors included:

Intertek (+9.1%), Sage Group (+8.6%), Rightmove (+8.0%), Bunzl (+6.8%) and Smiths Group (+6.4%)


Negative contributors included:

TP ICAP (-18%), TI Fluid Systems (-17%), WH Smith (-15%), Hargreaves Lansdown (-13%) and Paypoint (-13%).


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







Liontrust GF UK Growth C3 Inst Acc GBP






FTSE All Share






*Source: Financial Express, as at 30.11.2021, 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 30.09.2021, 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
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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