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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 UK Equity Fund (the ‘Fund’) returned 1.7% over the quarter, versus the 6.4% return from its comparator benchmark, the FTSE All Share Index, and the 3.9% average return from the Investment Association UK All Companies sector, also a comparator benchmark.*
UK equities rose strongly during the fourth quarter, led by large-cap stocks, particularly within the commodities and healthcare sectors. Companies such as AstraZeneca, GSK, and Rio Tinto were among the strongest performers. In contrast, industrials and technology lagged as investors reassessed how advances in artificial intelligence could disrupt existing business models. Consumer discretionary stocks were also weak, reflecting ongoing pressure on household spending.
From a sector perspective, an overweight exposure to healthcare and an underweight in energy contributed the most positively to relative performance. Overweight exposures to technology and industrials had the most significant negative impacts on relative performance.
Positive stock attribution
The most significant positive contributor to relative performance was not holding BAE Systems, the multinational aerospace and defence manufacturer. Shares were weak amid speculation around a potential de-escalation of the conflict in Ukraine.
An overweight position in Rentokil Initial, the international pest-control company, was the second leading contributor to the Fund’s relative returns. Rentokil’s third quarter results were better than expected due to improvement in the North America business.
Negative stock attribution
The second most significant detractor from relative performance was an overweight in Rightmove, the leading UK property portal. The company reduced its medium-term profit growth guidance as it increased investment in AI, which is expected to weigh on margins.
An overweight position in Auto Trader, the UK market-leading online car marketplace, was the second most significant detractor from relative performance. Although results were in line with expectations, investor concerns around the potential impact of AI on the company’s business model weighed on the share price.
Trading activity
During the quarter we initiated a new position in Softcat.
Softcat, is a value-added reseller of technology with exposure to more than 200 technology vendors. The company has an exceptional long-term track record and is well positioned to benefit from continued growth in technology spending, particularly in areas such as AI, cybersecurity, and cloud services. Softcat generates high returns on invested capital, is strongly cash generative, and consistently returns excess capital to shareholders. We believe the current valuation offers an attractive opportunity to initiate a position in this high-quality business.
We lowered our positions in Thermo Fisher and Tesco following strong share price performance.
Outlook
The global economic outlook for 2026 remains mixed, complex and challenging. Trade tensions and geopolitical risks continue to add uncertainty. Despite these headwinds, there are pockets of strength that could provide resilience and opportunities for investors.
The UK presents a mixed picture. Corporate and consumer debt have trended lower, improving balance sheet health. However, employment levels have been persistently weak for over a year, reflecting structural challenges beyond post-Covid normalization.
Short-term risks remain elevated across markets. In this environment, we believe it is crucial to focus on advantaged businesses that are well-positioned to deliver durable returns. These include high-quality companies with above-average returns on equity, strong growth prospects and prudent leverage structures. Building portfolios that are both economically and thematically diversified will enhance resilience against market uncertainties.
Discrete years' performance (%) to previous quarter-end:
| Dec-25 | Dec-24 | Dec-23 | Dec-22 | Dec-21 |
Liontrust UK Equity X Acc GBP | 6.1% | 11.7% | 11.3% | -9.7% | 18.1% |
FTSE All Share | 24.0% | 9.5% | 7.9% | 0.3% | 18.3% |
IA UK All Companies | 15.4% | 7.9% | 7.4% | -9.1% | 17.2% |
Quartile | 4 | 1 | 1 | 3 | 2 |
*Source: FE Analytics, as at 31.12.25, primary share class, total return, net of fees and income reinvested.
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.
- 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.
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