Liontrust UK Micro Cap 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

Eagle Eye Solutions stages large share price recovery on profit guidance upgrade.
Kitwave the latest Fund holding to receive takeover interest
Power Probe gives back last month’s post-IPO gains.

Performance

The Liontrust UK Micro Cap Fund returned 4.3%* in January. The FTSE Small Cap (excluding investment trusts) Index and the FTSE AIM All-Share Index comparator benchmarks returned 5.7% and 6.8% respectively. The average return of funds in the IA UK Smaller Companies sector, also a comparator benchmark, was 5.4%.

Commentary

Although global geopolitical risks were heightened by the US incursion in Venezuela, its threats to intervene amid widespread unrest in Iran, and Trump’s continued pursuit of Greenland, investor risk appetite showed little sign of being affected.

The MSCI All Country World Index returned 0.9%, split between emerging markets up 4.8% and developed markets edging 0.2% higher, the latter figure subdued by dollar weakness.

One of the key consequences of the UK’s unloved status in recent years, particularly within the small cap space, is an increase in opportunistic takeovers from private equity or corporate acquirers, who are able to recognise and exploit the opportunity created by valuations trading at significant discounts to long-term averages and global peers.

During January, delivery wholesale business Kitwave Group (+32%) became the latest Fund holding to move towards the exit door of the UK stock market. It recommended a 295p cash offer from a private equity firm – a 34% premium to Kitwave’s prior share price but lower than its level as recently as June, when a profit warning on weak leisure venue demand prompted a decline.

Eagle Eye Solutions’ (+35%) shares also staged a recovery from a summer 2025 profit warning, after commenting that profits for the year to 30 June 2026 are on course to comfortably exceed consensus expectations. The 2025 warning involved the loss of a high-margin US contract, a setback shown by the latest update to be an isolated one-off. The software-as-a-service and AI digital marketing specialist noted that the value of new customers won in the first half of its financial year has improved significantly, with last year’s global OEM agreement also delivering its first contracts.

Netcall (+19%), the provider of AI-driven enterprise technology, confirmed a solid, in-line performance in the six months to 31 December, with revenue up 11% in organic terms.

Animalcare (+19%) issued an upbeat assessment of 2025 – a year in which its Randlab acquisition boosted revenue and earnings growth to 20% and 50% respectively – and a 2026 outlook which notes positive momentum at the start of the year.

Newsflow was lighter among the largest portfolio detractors. New holding Power Probe (-15%) gave back the gains made in the immediate aftermath of last month’s IPO. Although EKF Diagnostics (-6.8%) lost some ground, its 2025 trading statement reported on solid trends, with revenues up 3% and adjusted earnings rising 10%.

Positive contributors included:

Eagle Eye Solutions (+35%), Kitwave Group (+32%), ActiveOps (+23%), Netcall (+19%) and Animalcare (+19%).

Negative contributors included:

CML Microsystems (-15%), Power Probe (-15%), Gately Holdings (-7.7%), EKF Diagnostics (-6.8%) and Mercia Asset Management (-6.8%).

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

		Dec-25	Dec-24	Dec-23	Dec-22	Dec-21
Liontrust UK Micro Cap I Acc		-1.2%	0.0%	1.0%	-17.1%	33.6%
FTSE Small Cap ex ITs		10.9%	13.8%	10.4%	-17.3%	31.3%
FTSE AIM All Share		8.5%	-4.0%	-6.4%	-30.7%	6.1%
IA UK Smaller Companies	4.1%		6.7%	0.5%	-25.2%	22.9%
Quartile		3	4	3	1	1

*Source: Financial Express, as at 31.01.26, total return (net of fees and income reinvested), bid-to-bid, institutional class. **Source: Financial Express, as at 31.12.25, total return (net of fees and income reinvested), bid-to-bid, institutional class.

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.
Smaller Companies 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. 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.