Liontrust Global Smaller Companies Fund

• Global equity weakness reflects investor difficulty pricing in the impact of tariffs.
• Portfolio weakness was focused on economically sensitive stocks such as specialist chemicals group Tri-Chemical Labs and fragrance distributor Interparfums.
• Safe haven demand supported shares in haematology technology specialist Sysmex and insurance broker Ryan Specialty

The Liontrust Global Smaller Companies Fund returned -7.7% in March, compared with the -5.7% return of the MSCI ACWI Small Cap Index and an average return of -6.0% in the IA Global sector, its comparator benchmarks.

Global equities fell in March, following a deluge of tariff announcements, reciprocal tariff measures, and a lack of progress in Russia-Ukraine peace negotiations. Investors are having a troublesome time pricing in the potential impact of tariffs, and therefore equity markets, led by the US, are de-risking aggressively.

Our Economic Advantage process leads to us own high quality businesses – often market leaders (69% of the portfolio is invested in companies that have number one market share globally or in their core regions of operation), with high returns on capital well above their cost of capital, strong pricing power, healthy balance sheets, and led by management teams with exceptional track records of capital allocation. Therefore, we are confident that our companies will be able to navigate tariffs and price increases sensibly and maintain their long-term earnings power.

Our more economically sensitive stocks (industrials, consumer, semiconductor-related) were weakest over the month, whilst outperformance was more idiosyncratic.

Largest detractors:

• Interparfums (-20% total return in sterling terms). This company has been stewarded exceptionally over more than 25 years by its two co-founders, signing exclusive deals with luxury brands to develop their fragrance products and then marketing and distributing them across its extensive global network. Fragrance has been a relatively robust category over the past few years amidst a global beauty industry slowdown, and the long-term dynamics remain compelling – particularly adoption in Asia and the ‘wardrobe effect’ as more consumers own multiple fragrances to suit a variety of different occasions. However, as a globally diversified business importing and exporting across many regions, tariffs will be impactful and the CEO pointed to price increases during an interview on Bloomberg more recently. The stock sold off over the month and on standard multiples such as price/earnings and EV/EBITDA trades at a decade-low valuation.
• Tri-Chemical Labs (-27%). Based in Japan, TCL is a specialist chemical maker with very high market shares in niche verticals of the semiconductor production process. The shares were weak, along with the broader semiconductor sector, as expectations for new industry-wide capex are falling on tariff-induced recession fears.
• Inficon (-21%) reported a slower quarter, with US political disruption causing purchase delays. Long-term prospects remain strong, especially with last year's Sysmex partnership. Weincreased our investment.

Top contributors:

• Fevertree Drinks (+21%) shares resumed their rally following an announcement earlier in the year that Fevertree signed a transformational partnership agreement with major US beer maker Molson Coors. The agreement will see Fevertree’s soft drinks and mixers produced and distributed by Molson Coors in the US throughout its extensive network. Fevertree is also actively buying back their shares.
• Sysmex (+3.5%). No new news from the world’s leading haematology analyser company. Sysmex’s highly recurring revenue base (most of its revenues come from one-time-use reagent sales) and the mission-critical nature of its technology for the blood testing process makes it a ‘defensive’ stock that benefits during a ‘flight to safety’ in markets.
• Ryan Specialty (+3.1%). Similar to Sysmex, there was no news from Ryan Specialty that led to its outperformance over the month. Rather, as a major specialty insurance broker it is also seen as somewhat of a ‘safe haven’ stock, as companies and individuals are unlikely to cancel their insurance policies even in a recession.

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

* 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.

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.

The Funds managed by the Economic Advantage team:

• May invest in smaller companies and may invest a small proportion (less than 10%) in unlisted securities. There may be liquidity constraints in these securities from time to time, i.e. in certain circumstances, a 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 a fund to defer or suspend redemptions of its shares. 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.
• 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.
• May 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.
• Outside of normal conditions, 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.

The risks detailed above are reflective of the full range of Funds managed by the Economic Advantage team and not all of the risks listed are applicable to each individual Fund. For the risks associated with an individual Fund, please refer to its Key Investor Information Document (KIID)/PRIIP KID.

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.