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Liontrust UK Growth Fund

November 2023 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 UK Growth Fund returned 1.6%* in November. The FTSE All-Share Index comparator benchmark returned 3.0% and the average return in the IA UK All Companies sector, also a comparator benchmark, was 4.4%.

Evidence of decelerating inflation helped propel a broad rally across asset classes, with investors largely disregarding central bankers’ efforts to promote the possibility of further policy tightening. By the end of the month, financial markets had moved to price in a peak at current interest rates in the US, UK and eurozone.

We’ve recently highlighted the low valuation of UK stocks – particularly small caps – relative to both their own history and to other international equity markets. While the former of these two discounts narrowed slightly during November’s strong equity market performance, the rally was global in nature, meaning that the UK still sits at a substantial valuation discount to other markets. We think this represents a very compelling longer-term investment opportunity in UK stocks.

YouGov (+21%) continued the ‘relief bounce’ we commented on last month following its solid set of full-year results which confirmed trading in the new year has begun in line with expectations. The fact that stocks are experiencing such strength on the back of merely ‘in-line’ statements remains emblematic of the level of pessimism currently priced into many share prices.

This month, data driven consultancy Next 15 Group notched up an 18% gain following a trading update which simply maintained revenue and profits guidance for the full year to 31 January 2024. In the three months to 31 October Next 15 generated organic net revenue growth of 2.5%  a similar rate to the first six months of the year.

One stock to rally due to better-than-expected financial results was Sage Group (+16%). It  released full-year results showing 12% growth in underlying recurring revenue growth (to £2.1bn) driven by a 25% expansion in its Business Cloud division (to £1.6bn). Operating profit rose 18% to £456m. The accounting, HR and payroll software company was bullish over its short-term prospects, forecasting that profit margins trend upwards from next year and commenting that AI-powered services will increasingly become a revenue growth engine.

In its recent history, Indivior (-18%) has issued a string of upgrades to growth guidance for its Sublocade treatment for opoid addiction. Sublocade has grown to be Indivior’s largest seller, taking on the mantle from the Suboxone drug that is seeing ongoing sales declines following the loss of IP protection which allowed cheaper generic competition. While a Q3 update in November once again raised Sublocade’s 2023 sales forecast, this was offset by a downgrade in guidance for its smaller Perseris treatment. Indivior also commented that operating expenses would now be slightly higher than initially forecast, as it increases investments in Sublocade’s further growth.

Diageo (-11%) warned that a weakening outlook for its Latin American and Caribbean division (about 11% of total sales) will lead group sales growth to slow. The region is expected to experience a 20% year-on-year organic net sales decline. Diageo cited macroeconomic pressures in the region which are resulting in lower consumption and consumer downtrading.

While Synthomer (-9.0%) didn’t downgrade its financial forecasts, a trading update commented that trading has been ‘broadly consistent’ with its expectations and maintained its outlook for subdued demand. The chemicals business is experiencing soft demand across most of its end markets. Its speciality lines are showing more resilient pricing and volumes than its base chemicals products, which have been heavily affected by increased global competition.

Shares in BAE Systems (-4.9%) have been strong this year, significantly outperforming the index, but slid slightly in November after issuing an in-line full-year trading statement. The defence group maintained the 2023 guidance given at the time of its half-year results: sales growth of between 5% and 7% and an underlying operating profit improvement of 6% to 8%.

Overall, it was notable that there was a more ‘risk on’ feel to the market in November, with investors looking through short-term trading headwinds for more cyclical names. In addition to the positive contributors mentioned earlier, there were also decent rallies for the likes of recruitment business PageGroup (+19%) and financial securities broker TP ICAP (+18%) despite neither issuing updates during the month (although TP ICAP did issue an in-line trading update on the last day of October).

Positive contributors included:

YouGov (+21%), PageGroup (+19%), TP ICAP (+18%), Next 15 Group (+18%) and Sage Group (+16%).

Negative contributors included:

Indivior (-18%), Diageo (-11%), Synthomer (-9.0%), BAE Systems (-4.9%) and BP (-3.5%).

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







Liontrust UK Growth I Inc






FTSE All Share






IA UK All Companies












*Source: Financial Express, as at 30.11.23, total return (net of fees and income reinvested), bid-to-bid, institutional class.

**Source: Financial Express, as at 30.09.23, total return (net of fees and income reinvested), bid-to-bid, primary class.

Understand common financial words and terms See our glossary

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.

The Fund may encounter liquidity constraints from time to time. The spread between the price you buy and sell shares will reflect the less liquid nature of the underlying holdings.

The Fund may invest in companies listed on the Alternative Investment Market (AIM) which is primarily for emerging or smaller companies. The rules are less demanding than those of the official List of the London Stock Exchange and therefore companies listed on AIM may carry a greater risk than a company with a full listing. Outside of normal conditions, the Fund may hold higher levels of cash which may be deposited with several credit counterparties (e.g. international banks). A credit risk arises should one or more of these counterparties be unable to return the deposited cash. Counterparty Risk: any derivative contract, including FX hedging, may be at risk if the counterparty fails.


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.

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