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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.
- Next 15 rallies on evidence of strong operational progress as it implements new business strategy.
- BAE Systems and Weir Group benefit from improving investor sentiment, while Diageo gives back recent gains.
- Portfolio underweights to basic materials and financial sectors represent a relative performance headwind as these areas rally.
The Liontrust GF UK Growth Fund returned -1.6%* in September. The Fund’s comparator benchmark, the FTSE All-Share, returned 1.9%.
Equity market gains were aided by a US rate cut, which was increasingly priced into markets in the wake of data showing weaker than expected jobs creation. The Fed opted to cut by a quarter percentage point, its fourth cut since rates peaked in 2023, but the first in nine months. Having cut five times in the last 18 months, the Bank of England kept rates on hold in September.
Two of the strongest areas on the UK market were basic materials (+14%) and financials (+4.3%) – a large headwind to Fund performance given that these are two core underweights for the portfolio.
To recap, the fund managers have made a long-term, high-conviction decision not to invest in banks due to the belief that historically they have proved themselves to be very poor compounders of capital, with low earnings quality given their elevated risk profile and inescapable dependence on interest rate movements which are outside of their control. Similarly, the Fund avoids miners due to their reliance on prices of tangible assets – a factor over which they have no influence– rather than the intangible assets the team believes can confer sustainable competitive advantage.
The underweights to these two areas presented a c.1% drag on relative performance.
September’s largest contributors and detractors to portfolio performance included some sentiment-driven moves, with no newsflow catalysts. On the positive side, BAE Systems (+17%) and Weir Group (+11%) benefitted from improving investor sentiment due to a positive structural backdrop for defence spending and metals mining respectively. By contrast, portfolio returns were hampered by some stock specific weakness at Diageo (-13%) – which reversed last month’s gains – as well as Unilever (-5.4%) and AstraZeneca (-5.2%).
Online greeting card and gifts platform Moonpig (+14%) released an update on trading to coincide with its AGM. Since 30 April, it has seen around 10% revenue growth at its Moonpig brand while its Greetz division is also now showing modest year-on-year growth. Both businesses have seen rising order value. For this financial year, the company continues to expect mid-single percentage growth in adjusted EBITDA (earnings before interest, tax, depreciation and amortisation).
At GSK (+8.4%) investors welcomed the confirmation of leadership succession, with longstanding CCO Luke Miels announced as the successor to Emma Walmsley, as widely anticipated.
A year ago, Next 15 Group (+23%) issued a profit warning triggered by the loss of a significant contract – in the Mach49 agency – and a softening of client spending from its technology customers in particular. The fund managers subsequently engaged at length with the company to form a better understanding of the factors at play, as well as steps that would be taken to return the company to a solid trading footing.
Interim results released last month show that although the backdrop for discretionary marketing spend remains tough, the company is making solid operational progress, with financials on track to meet market expectations for the full year. Next 15 also demonstrated progress on its strategic initiative to consolidate its operations, in order to achieve efficiencies and focus on areas with the strongest long-term profitability and growth potential. In the pursuit of this initiative, 22 businesses within the portfolio have already been reduced to 12.
Hilton Food Group (-20%) is a packager of meat, seafood, vegetarian, vegan and convenience food products for large grocery retail customers such as Tesco in the UK and Woolworths in Australia and New Zealand. A half-year trading update highlighted a couple of temporary headwinds which pulled the share price lower. In the UK its seafood performance has been adversely affected by cost inflation leading to softer demand for white fish, while in Europe, its smoked salmon business was impacted by regulatory restrictions on shipments to the US. It is a sign of the volatility within markets – and the unforgiving mood towards any negative news – that a low single digit earnings downgrade was met by such an extreme share price reaction in the short term.
In terms of portfolio activity, an exit was completed from the de minimis residual position in Synthomer. Ongoing heightened difficulties in the macroeconomic backdrop have prolonged the period of uncomfortable balance sheet stretch for the company, which elevates the short-term risk profile. In addition, with such a small position, we felt that the upside potential was naturally capped even in the event of a sharp cyclical upswing catalysing an improvement in trading and a re-rating in the shares. With much stronger compounding potential across the other stocks in the portfolio, we made the decision to exit.
There were no new buys during the month, with two new positions having been initiated in August (Foresight and Cranswick).
Positive contributors included:
Next 15 Group (+23%), BAE Systems (+17%), Moonpig Group (+14%), Weir Group (+11%) and GSK (+8.4%).
Negative contributors included:
Hilton Food Group (-20%), Diageo (-13%), Unilever (-5.4%), AstraZeneca (-5.2%) and Shell (-2.9%).
Discrete years' performance** (%) to previous quarter-end:
Past performance does not predict future returns
| Sep-25 | Sep-24 | Sep-23 | Sep-22 | Sep-21 |
Liontrust GF UK Growth C3 Inst Acc GBP | -0.6% | 7.2% | 11.2% | -5.2% | 25.7% |
FTSE All Share | 16.2% | 13.4% | 13.8% | -4.0% | 27.9% |
| Sep-20 | Sep-19 | Sep-18 | Sep-17 | Sep-16 |
Liontrust GF UK Growth C3 Inst Acc GBP | -10.2% | 2.5% | 8.8% | 10.6% | 24.5% |
FTSE All Share | -16.6% | 2.7% | 5.9% | 11.9% | 16.8% |
*Source: Financial Express, as at 30.09.25, 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 30.09.25, total return (net of fees and income reinvested), primary class. Investment decisions should not be based on short-term performance.
Key Features of the Liontrust GF UK Growth Fund
The investment objective of the Fund is to provide long term capital growth by investing predominantly in UK equities. The Fund invests at least 80% in securities of companies traded on the UK and Irish stock exchanges. The Fund invests predominantly in UK large and mid-cap stocks.
5 years or more.
4 (Please refer to the Fund KIID for further detail on how this is calculated)
Active
The Fund is considered to be actively managed in reference to the FTSE All Share Index (the “Benchmark”) by virtue of the fact that it uses the Benchmark for performance comparison purposes. The Benchmark is not used to define the portfolio composition of the Fund and the Fund may be wholly invested in securities which are not constituents of the Benchmark.
Understand common financial words and termsSee our glossary
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.
- Diversification Risk: the Fund is expected to invest in companies predominantly in a single country which maybe subject to greater political, social and economic risks which could result in greater volatility than investments in more broadly diversified funds.
- Liquidity Risk: 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.
- Smaller Companies Risk: 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.
- 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.
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.
DISCLAIMER
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.
This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID) and/or PRIIP/KID, which provide full product details including investment charges and risks. These documents can be obtained, free of charge, from www.liontrust.com or direct from Liontrust. 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.
