Liontrust Global Smaller Companies Fund January 2026 review | Insights

Past 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

Global small cap equities progressed well over the month, led by emerging markets and the USA.
Software stocks indiscriminately sold off after Anthropic released a new agentic AI ‘coworker’ for enterprises.
The fund underperformed slightly due to its underweight to mining equities (see copper, gold and silver prices) and overweight to software stocks.

Performance

The Liontrust Global Smaller Companies Fund returned 1.6% in January, compared with the 3.8% return of the MSCI ACWI Small Cap Index and an average return of 1.1% in the IA Global sector, its comparator benchmarks.

Commentary

Global small cap equities progressed well over January, led by emerging markets given the weakening US dollar (which generally eases trade, financing and liquidity conditions for those markets) and rising commodity prices.

Supportive economic data read-outs in the US such as manufacturing orders, construction plans, and moderating inflation buoyed cyclical and consumer stocks. European small caps were only slightly up, suffering from geopolitical tensions around President Trump’s comments on taking over Greenland.

Japanese small caps performed well, as Prime Minister Takaichi announced a snap election as she hopes to secure a majority – and would enable her to follow through with ambitious fiscal spending plans. Japanese long-term bonds had their worst start to a year since 1994.

Software

Perhaps most significantly, Anthropic launched a new no-code product called Claude Cowork. It is agentic AI… a program that sits within one’s PC and operates as a coworker, completing tasks with the ability to intelligently contextualise data sources. Claude Cowork’s capabilities indicate the path of AI evolution (at the moment it is only a research preview) – from chat-based AI tools to agentic 'delegate-to' AI assistants. As a result, many software stocks fell on fears they could eventually be replaced or disrupted by AI.

We found this unsurprising – first, that easy-to-use agentic AI for enterprises has been developed, and second, that markets are panicking and all software stocks are being painted with the same brush.

Over the past year, we have spent a great deal of time and attention on the disruption risk and competitive advantage erosion in software. As a result, where we continue to own enterprise software, it is firms that offer products which are highly specialised, requiring critical external inputs to function (i.e. proprietary data), operate as a platform rather than a tool, enable multiple stakeholders to engage with the underlying data and run workflows, and therefore are deeply embedded as systems of record, action and performance. We believe these products will be the ultimate beneficiaries of AI integration. Now they are cheaper given the market’s ‘shoot first and ask questions later’ approach, it is painful in the short term, but we see great opportunities in these stocks over the long run.

Top contributors:

Park Systems (+42% in sterling terms) – A number of semiconductor manufacturers in South Korea, the US and Taiwan increased their spend on new factories. This will directly benefit Park Systems, which is one of the leading producers of nanoscale microscopy (very sophisticated microscopes which detect defects on silicon wafers).
CLASSYS (+34%) – No particular news, but this leading player in anti-aging treatments (such as radiofrequency and microneedling machines) continues to grow strongly in both South Korea and overseas.
Chroma ATE (+24%) – Chroma has continued to see strong sales growth in its semiconductor testing business, with strong customer relationships (particularly with Nvidia and AMD for their AI GPU system-level test requirements).

Largest detractors:

Altus Group (-19% in sterling terms) – Fell on AI disruption concerns, as discussed above.
Paylocity (-13%) – Fell on AI disruption concerns, as discussed above.
Asahi (-13%) – No particular news, but as bond yields rise, value stocks generally outperform growth stocks, and this has been the case in Japan year-to-date. Asahi Intecc offers the market’s best performing guidewire used in preventative cardiovascular operations and continues to grow sales at a healthy pace.

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

	Dec-25	Dec-24	Dec-23	Dec-22	Dec-21
Liontrust Global Smaller Companies C Acc	-6.8%	6.2%	20.8%	-27.1%	8.0%
MSCI ACWI Small Cap	11.5%	9.6%	10.2%	-8.4%	17.2%
IA Global	11.2%	12.6%	12.7%	-11.1%	17.7%
Quartile Ranking	4	4	1	4	4

* Source: FE Analytics, as at 31.12.25, 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.

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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