Fund of the month: Liontrust Special Situations

Written by: Andy Parsons
To coincide with the celebration of its 10 year anniversary, Andy Parsons, head of investment research and advisory services at The Share Centre, picks Liontrust Special Situations as November's fund of the month.

This fund is co-managed by the highly respected pair of Anthony Cross and Julian Fosh and was launched on 10 November 2005. During this period, the fund has consistently delivered, returning first quartile calendar performance in six of the last nine complete calendar years, and is ranked first quartile year to date with a return of 11% compared to the sector average of 4.38%. The fund seeks to deliver long term capital growth with no restrictions on company size or sector allocation.

Investment selection is driven by what the pair terms their ‘Economic Advantage’ process, whereby the managers seek to identify companies that have intangible strengths which competitors would struggle to replicate.  These criteria include such elements as intellectual property, distribution channels and repeat business, all of which they believe are the bedrocks to a company’s strength. It is these elements which they believe the competitors will struggle to replicate and therefore naturally create high barriers to entry.  It is also worth noting that for any smaller company to be selected, they require the directors of the company to have a minimum 3% equity ownership.

At the present time, the fund has a strong sectorial bias towards industrials, consumer services and technology, with top holdings currently including Emis, Relx, Diageo, Compass and NCC.  The Liontrust Special Situations fund is an investment opportunity for those seeking a strong management team with a proven track record of identifying opportunities from across the market cap spectrum.

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