Best performing UK small cap fund revealed

Best performing UK small cap fund revealed

The £34m Liontrust UK Micro Cap fund was the best performer in the IA UK Smaller Companies sector in the 2018 calendar year.

The fund, which is managed by the experienced duo of Anthony Cross and Julian Fosh, as well as Victoria Stevens and Matthew Tonge, returned 3 per cent in 2018, a year in which the average fund in the sector lost 11.7 per cent.

The fund reaches is three year anniversary in March. It invests in companies with a market cap of below £150m but is prepared to stay invested in the companies up to a market cap of £250m.   

The largest sector exposure in the fund is telecoms, media and technology, which accounts for just over a third of the capital, with the next largest sector exposure being industrials.

The managers prefer to invest in companies where the management team are also significant shareholders.

They believe this encourages companies to be run in a more conservative way, with fewer acquisitions or debt taken on by the business.

Mr Fosh and Mr Cross also run the Liontrust UK Special Situations fund.

Jason Hollands, managing director for business development and communications at Tilney, said: "The fund follows a well-articulated process, called the economic advantage approach, that looks for companies able to sustain a higher than average level of profitability for longer than expected.

"The companies the fund invests in have distinct characteristics, like ownership of intellectual property."