Liontrust SF UK Growth Fund

Q1 2018 review

The Fund returned -3.9% over the quarter, outperforming both the IA UK All Companies sector average of -5.9% and -7.3% from the MSCI UK Index*.


Our process targets businesses that can grow structurally, driven by the shift towards a global economy that is more efficient, provides a higher quality of life and is more resilient.

In a poor period for risk assets overall, Softcat was the Fund’s main contributor to performance for the second quarter running. One of the leading value-added software resellers in the UK, the company outperformed the benchmark by a huge 39% over the first quarter alone.  

We wrote previously that we suspected Softcat was potentially positively impacted by Brexit, as customers may have brought forward big purchases before IT vendors hiked prices to counteract weaker sterling. The long-term thesis on Softcat remains in place, namely that a relentless focus on both customer and employee satisfaction results in a distinctive organisational culture that will continue to drive strong sales and profitability growth.

Our investment in Abcam was another a top performer over the quarter, with the shares outperforming the benchmark by 25%. Abcam is the leader in providing research grade antibodies, which are used by scientists in their work to further our knowledge of how the human body works and how to fix it when it doesn’t.

We have invested in the company as part of our theme of Enabling innovation within the healthcare system. Of particular interest to us is the company’s continued focus on product quality. There is a huge need in research to ensure robust and repeatable results when conducting scientific experiments.

We have held Abcam in our UK equity funds since it first listed on the London Stock Exchange in late 2005 and it has produced average annual returns in excess of 30% over the past decade.

Another positive contributor was Worldpay, which falls under our Increasing financial resilience theme. Worldpay is focused on acquiring E-commerce merchants and benefits from the continued shift away from cash to digital payments.

Worldpay and its US peer Vantiv successfully combined at the start of the year and the new entity reported strong full-year results for 2017. The business is highly cash generative and should benefit from scale: according to figures published in The Nilson Report, the combined business is now the largest merchant acquirer in the US, the UK and worldwide.

Elsewhere over the quarter, we also participated in an IPO for TruFin, one of our smaller holdings in the Fund. TruFin is a holding company with four key assets: an SME (small and medium-sized enterprise) supply chain financing operation, two businesses that are classified as accounting software, and a 15% stake in the peer-to-peer lending platform Zopa.

Each asset provides clear sustainability benefits to society, from helping small businesses receive early payment for their services to public sector bodies in exchange for modest discounts, to providing working capital finance to small and medium sized businesses across the UK.

Despite the smaller size (the market cap is less than £200m) relative to the rest of the companies in the Fund, we felt the price at which these assets came to market, as well as the strong sustainability themes they were exposed to, merited a modest position.


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








Liontrust Sustainable Future UK Growth 2 Acc












IA UK All Companies













*Source: Financial Express, as at 31.03.18, primary share class, total return, net of fees and income reinvested.


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Key Risks

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. 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.


This content 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.  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, faxed, reproduced, divulged or distributed, in whole or in part, without the express written consent of Liontrust. 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.

Tuesday, April 24, 2018, 4:04 PM