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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.
- Encouraging return of momentum to UK small caps, which have led the recovery from the market’s April lows.
- Gear4Music rallies strongly on signs of improving trading momentum.
- Solid State also among the positive contributors to performance after a large contract win.
The Liontrust UK Micro Cap Fund returned 4.7%* in June. The FTSE Small Cap (excluding investment trusts) Index and the FTSE AIM All-Share Index comparator benchmarks returned 4.8% and 3.5% respectively. The average return of funds in the IA UK Smaller Companies sector, also a comparator benchmark, was 3.5%.
Despite ongoing US trade policy uncertainty and a spike in geopolitical tensions as Israel launched attacks on Iran, investment markets showed little signs of risk-off or flight-to-safety behaviour, even after the US became directly involved by targeted Iranian nuclear facilities.
Global equity markets largely registered modest gains, taking several to fresh all-time highs, while a spike in oil and gold prices were short-lived. It was pleasing to see UK small-cap stocks, AIM in particular, continue the strong run of short-term performance; since Liberation Day AIM has been one of the best performing markets globally.
The Fund’s strongest riser in June was Gear4Music Holdings (+61%), after it commented signs of improving market conditions. The online retailer of musical instruments and equipment has faced a very challenging consumer demand backdrop since 2022, but its latest results showed a return to growth and strengthening trading momentum. In the six months to 31 March revenues rose 4%, taking full year growth to 2% (to £147 million). Since mid-March, this growth has accelerated to a double-digit level with sales momentum and gross margins on an upward trajectory. As well as some self-help measures including a strategic review, Gear4Music has also benefitted from a more benign competitive landscape following the recent failure of two UK peers. As a result of the pickup in trading, Gear4Music commented that it expects to exceed market expectations for the financial year to 31 March 2026.
Having warned at the start of the year on the impact of short-term macroeconomic headwinds, shares in Vianet (+27%) have since recovered following a more upbeat April trading update and June’s set of full-year results. The specialist in beverage, vending and unattended retail hardware and software has been executing a strategic shift away from software sale towards long-term rental agreements with significant recurring income.
Another notable contributor was Solid State (+20%), which announced a $5.2m follow-on contract win providing IoT technology into a smart vending machine customer.
The largest detractor from performance was Eagle Eye Solutions (-43%), which lost a high-margin US contract, leading it to downgrade guidance for the financial year to 30 June 2026. Whilst the loss was disappointing it was an isolated incident and does not diminish the significant opportunity to scale with the recently announced global OEM partnership.
Positive contributors included:
Gear4Music Holdings (+61%), Vianet (+27%), Solid State (+21%), ActiveOps (+16%) and Mercia Asset Management (+16%).
Negative contributors included:
Eagle Eye Solutions (-43%), James Cropper (-22%), Calnex Solutions (-15%), Oxford Metrics (-15%) and Brickability Group (-9.1%)
Discrete years' performance (%) to previous quarter-end**:
| Jun-25 | Jun-24 | Jun-23 | Jun-22 | Jun-21 | |
Liontrust UK Micro Cap I Acc | -5.1% | 13.6% | -3.8% | 15.9% | 59.5% | |
FTSE Small Cap ex ITs | 13.1% | 18.5% | -0.3% | -14.6% | 65.2% | |
FTSE AIM All Share | 2.8% | 3.4% | -12.5% | -29.0% | 42.5% | |
IA UK Smaller Companies | 2.6% | 14.1% | -5.5% | -22.1% | 53.1% | |
Quartile | 4 | 2 | 2 | 1 | 2 | |
*Source: Financial Express, as at 30.06.25, total return (net of fees and income reinvested), bid-to-bid, institutional class. **Source: Financial Express, as at 30.06.25, total return (net of fees and income reinvested), bid-to-bid, institutional class.
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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.
- 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.
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