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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.
Key highlights
- We have not been invested heavily in the AI theme, given scepticism around valuations and long term financial sustainability, and therefore our returns have lagged this year.
- Top contributors included Chroma ATE, Cadre Holdings and Medpace.
- Pool Corporation, Choice Hotels and Paylocity were among the notable detractors.
Performance
The Liontrust Global Smaller Companies Fund returned 0.9% in October, compared with the 3.0% return of the MSCI ACWI Small Cap Index and an average return of 4.0% in the IA Global sector, its comparator benchmarks.
Commentary
Global small cap equities rose in October, led by the US and Asia. In the US, inflation continued to cool, the Federal Reserve lowered its benchmark interest rate and announced plans to end its balance sheet drawdown, and President Trump had a constructive meeting with President Xi of China leading to a softening of trade frictions (for now). US equity markets were driven by technology and financial sectors, the former buoyed by continued momentum in AI related investments filtering down the industrial supply chain. In Asia, despite a constrained consumer environment, industrial production data improved, Chinese authorities continue to provide policy support, and the semiconductor industry in Taiwan is booming given the ongoing AI build out.
Europe and the UK was more mixed on economic data and equity returns. Japanese small caps were flat despite a surprise election result, though select industries saw rallies (particularly defence). In global oil markets, Brent Crude remains in the $60-70 range, as OPEC+ continues to add daily supply. This price range constrains new drilling activity in the Permian where new wells and the number of frac crews working continues to decline.
The Liontrust Global Smaller Companies fund underperformed the MSCI ACWI Small Cap Index over the month. In a market driven by AI spending momentum, companies linked to data centre construction, semiconductors and power generation are leading the market. Narrowness of returns and concentration of global equity markets has increased. We have not been invested heavily in the AI theme, given scepticism around valuations and long term financial sustainability, and therefore our returns have lagged this year. We invest in businesses with unique intangible assets, strong balance sheets, dominant industry positions and run by highly-aligned management teams – all markers of high quality and the potential for durable earnings compounding over the long term.
Top contributors:
- Chroma ATE (43.7% total return in sterling terms) – One of our few AI beneficiaries, Chroma has continued to see strong sales growth in its semiconductor testing business, with strong customer relationships (particularly with Nvidia for its AI GPU system-level test requirements).
- Cadre Holdings (+19.4%) – A unique business, Cadre has a dominant position in the bulletproof vest and holster market for law enforcement in the US. It also has a leading explosives-disposal protective suit business. More recently, the management team have built out a nuclear safety business line which the market has begun to appreciate, given the heightened demand for nuclear power in recent years.
- Medpace (+17%) – Continues to report strong orders, revenues, and profitability, far exceeding market expectations. Medpace is a niche, focused company with a long track record of supporting biotech firms through drug trial phases.
Largest detractors:
- Pool Corporation (-12%) – Pool Corp is the USA’s leading distributor of products for building and maintaining a swimming pool. US consumer data and sentiment readings were weak in October, therefore the stock fell as new pool construction (though only c.20% of PoolCorp’s sales, the rest is highly recurring pool maintenance) is tied to consumer confidence.
- Choice Hotels (-11%) – The shares fell given the above-mentioned weak consumer data and surveys.
- Paylocity (-9.1%) – Despite strong quarterly results throughout the year, beating estimates, Paylocity has sold off due to concerns around employment in the US, as the company provides HR-related software. In our view, the company has a market-leading product, effective go-to-market motion, and is now incredibly good value as the market focuses on near-term worries rather than long term compounding potential.
Discrete years' performance* (%) to previous quarter-end:
| Sep-25 | Sep-24 | Sep-23 | Sep-22 | Sep-21 |
Liontrust Global Smaller Companies C Acc | -3.1% | 14.7% | 7.4% | -24.9% | 25.0% |
MSCI ACWI Small Cap | 12.4% | 13.4% | 5.4% | -9.2% | 34.8% |
IA Global | 12.1% | 16.2% | 7.8% | -8.9% | 23.2% |
Quartile Ranking | 4 | 3 | 3 | 4 | 2 |
* Source: FE Analytics, as at 30.09.25, 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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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.
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