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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 Global Smaller Companies Fund returned 3.3% in May, compared with the 5.1% return of the MSCI ACWI Small Cap Index and an average return of 5.1% in the IA Global sector, its comparator benchmarks.
Global equity markets recovered in May after a tough April rocked by tariff announcements, bond yield volatility and geopolitical negotiations. The US President’s softening stance on tariffs – announcing pauses and negotiations with major partners – led to a relief rally in some of the hardest hit sectors (particularly consumer and materials). However, the announcement of a large US tax and spending bill led to a further increase in US long-dated bond yields as markets worry about America’s ability to service its debts in the long term. Higher long-end rates and continued elevated political uncertainty continues to weigh on both consumer and corporate spending plans.
In Europe, the environment is relatively more stable, with falling inflation, positive fiscal impulse (particularly in its largest economy Germany), and continued central bank rate cutting. In Japan, inflation remains elevated and institutions stepped away from long term bond auctions, leading to a sharp increase in the 30-year yield. Value stocks tend to outperform quality growth stocks as yields increase, and that has certainly been the case in Japan this year.
The portfolio underperformed the index over the month. Our energy stocks fell as global industrial demand data has been negative over the month. Our positions in leading residential construction related companies in the US were weak as the prospects for near term growth in new home sales is held back by mortgage rates. On the positive side, our semiconductor-related companies rallied in May in line with a general tech sector recovery.
Top contributors:
- Interparfums (+24% total return in sterling terms) – the shares have now rallied some 35% from their April lows. A brilliant international fragrance developer and distributor still led by its two co-founders, with an exceptional long-term financial track record and well exposed to attractive secular growth in global fragrance adoption. The stock was hard hit during April on tariff announcements and hit a decade-low valuation but has now recovered the lost ground as tariff pauses and negotiations have been announced.
- Objective Corporation (+22%) – this is a market leading software provider to local councils in Australia, New Zealand and the UK, with expansion opportunities in the US. Its software is mission critical to regulatory workflows, has very high retention rates, and the business has a solid track record of innovation and product upsell. The company is led by its founder who retains a 65% equity stake. The shares have benefitted recently given Objective’s relative stability and defensiveness in an uncertain macroeconomic environment, as well as delivering continued strong revenue growth and profitability.
- Gaming Realms (+20%) – a company with unique IP, that continues to deliver strong revenue growth, profit expansion and successful new product development in the burgeoning US gambling market. The shares have been strong since the impressive results in March.
Largest detractors:
- Aris Water Solutions (-13%) – the company delivered strong operating results, but forward-looking guidance was conservative, given a lower oil price reduces drilling activity and return on investment on new well construction in the Permian.
- Sysmex (-10%) – it reported solid results and we remain excited about the medium-term outlook for its new flagship haematology machine which improves reagent throughput and lab productivity. However, the company guided for a slower pace of sales in 2025 due to the impact of tariffs.
- Classys (-9.5%) – the shares have performed very well in 2025, as the business reported very strong export growth for its skin rejuvenation technologies. Private equity firm Bain Capital owns c.54% of the company and reduced its position via a share placing in May which put pressure on the stock.
Discrete years' performance* (%) to previous quarter-end:
| Mar-25 | Mar-24 | Mar-23 | Mar-22 | Mar-21 |
Liontrust Global Smaller Companies C Acc | -11.7% | 26.3% | -10.0% | 1.8% | 48.5% |
IA Global | -0.3% | 16.7% | -2.6% | 8.4% | 40.6% |
MSCI ACWI Small Cap | -2.6% | 14.0% | -3.7% | 4.4% | 63.6% |
Quartile Ranking | 4 | 1 | 4 | 4 | 2 |
* Source: FE Analytics, as at 31.03.25, 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.
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.
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