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VIew NowPast 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 Global Smaller Companies Fund returned 3.9% in July, compared with the 4.7% return of the MSCI ACWI Small Cap Index and an average return of 4.5% in the IA Global sector, its comparator benchmarks.
July saw a number of trade agreements agreed which lowered the final tariff rate between the US and key trade partners such as Vietnam, Japan and the EU. Equity markets responded positively and were further buoyed by the passage of the One Big Beautiful Bill Act (OBBBA), given its rather expansionary fiscal impetus. The amount of debt required to support the tax cuts in the Act further worried bond markets as to the sustainability of long-term US government debt, therefore yields continued upwards over the month.
In Japan, the ruling LDP lost its majority, with the vote splintering across a tail of upstart parties. This reflects the dissatisfaction and anxiety of Japanese people as sticky inflation continues to put pressure on real living standards (particularly as food inflation remains above 7%). It is likely a new coalition will focus on consumer purchasing power. The weak yen also does not help given Japan are a net importer of oil. Unsurprisingly given this context, the 10-year government bond yield is now at its highest level since 2008, rising further over the month.
In a market environment of fiscal largesse being approved, trade deals being agreed and overt political pressure on central banks, cyclical sectors such as capital goods, energy and financials led global small caps. Defensive sectors such as real estate, consumer staples and healthcare lagged. The Liontrust Global Smaller Companies fund lagged its benchmark in this pro-cyclical context, given our focus on quality leads us to own a more diversified and defensive portfolio.
Top contributors:
- Medpace Holdings (+41% total return in sterling terms) – A founder-led business with an incredible track record of organic growth and capital allocation, Medpace provides outsourced research and clinical trials services for biotech firms aiming to get new drugs approved. It reported very strong quarterly results and outlook for the remainder of the year.
- Alpha Group International (+31%) – Another wonderful founder-led business that provides foreign currency hedging services for corporates, that has a long runway for growth in an underpenetrated market. During the month, US listed company Corpay made an offer to acquire Alpha Group for £42.50 a share, which is expected to complete in Q4 2025.
- Installed Building Products (+16%) – Despite continued headwinds for the US residential construction market, this high-quality compounder with a great market position and long-term earnings power rallied on hopes that difficult near term trading conditions have bottomed.
Largest detractors:
- Progress Software (-22%) – Despite quarterly results that beat sales and earnings expectations, organic growth was underwhelming. In late July, it was announced that a class action lawsuit against Progress and other defendants relating to the large 2023 Moveit data breach proceeded to trial on a number of counts.
- Donnelley Financial Solutions (-11%) – Reported a weak set of quarterly numbers as capital markets activity remains subdued. The shift towards software solutions continues strongly.
- Morningstar (-8.7%) – Organic growth rates reported in the last set of quarterly financials were slower than expected. Strong profitability improvements over the past two years has driven earnings, offsetting the slowing sales growth. We like the significant pools of data assets which represent a unique IP moat as AI transforms the financial industry.
Discrete years' performance* (%) to previous quarter-end:
| Jun-25 | Jun-24 | Jun-23 | Jun-22 | Jun-21 |
Liontrust Global Smaller Companies C Acc | -0.9% | 10.1% | 14.0% | -26.1% | 31.3% |
MSCI ACWI Small Cap | 4.8% | 11.3% | 8.0% | -11.1% | 37.8% |
IA Global | 4.6% | 14.9% | 10.8% | -8.8% | 25.9% |
Quartile Ranking | 4 | 4 | 2 | 4 | 1 |
* Source: FE Analytics, as at 31.07.25, total return, net of fees and income reinvested. The current fund managers’ inception date is 14.01.25.
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KEY RISKS
Past performance does not predict future returns. You may get back less than you originally invested.
We recommend this fund is held long term (minimum period of 5 years). We recommend that you hold this fund as part of a diversified portfolio of investments.
- Overseas investments may carry a higher currency risk. They are valued by reference to their local currency which may move up or down when compared to the currency of the Fund.
- The Fund, may in certain circumstances, invest in derivatives but it is not intended that their use will materially affect volatility. Derivatives are used to protect against currencies, credit and interest rate moves or for investment purposes. The use of derivatives may create leverage or gearing resulting in potentially greater volatility or fluctuations in the net asset value of the Fund. A relatively small movement in the value of a derivative's underlying investment may have a larger impact, positive or negative, on the value of a fund than if the underlying investment was held instead.
- Credit Counterparty Risk: 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.
- Liquidity Risk: as the Fund is primarily exposed to smaller companies there may be liquidity constraints from time to time, i.e. in certain circumstances, the fund may not be able to sell a position for full value or at all in the short term. This may affect performance and could cause the fund to defer or suspend redemptions of its shares. In addition the spread between the price you buy and sell units will reflect the less liquid nature of the underlying holdings.
- Emerging Markets Risk: the Fund may invest in emerging markets which carries a higher risk than investment in more developed countries. This may result in higher volatility and larger drops in the value of the fund over the short term.
- ESG Risk: there may be limitations to the availability, completeness or accuracy of ESG information from third-party providers, or inconsistencies in the consideration of ESG factors across different third party data providers, given the evolving nature of ESG.
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This material is issued by Liontrust Investment Partners LLP (2 Savoy Court, London WC2R 0EZ), authorised and regulated in the UK by the Financial Conduct Authority (FRN 518552) to undertake regulated investment business.
It 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.
This information and analysis 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, no representation or warranty is given, whether express or implied, by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified.
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