Liontrust is considering rebr-anding its Smaller Companies fund to more adequately reflect its inves...
Liontrust is considering rebr-anding its Smaller Companies fund to more adequately reflect its investment mandate, writes Jenne Mannion.
The £49m fund may be renamed the Liontrust Intellectual Capital fund to more accurately reflect the investment process adopted by fund manager Anthony Cross.
Cross is talking to IFAs about how the label small company is meaningless and misleading.
Cross said: "Beyond being a vague indication of market capitalisation and merely an arbitrary boundary line in the carve up of the stock market, the term small company tells you nothing."
The small companies generalisation ignores the fundamental differences between companies that can lead to a significant divergence in performance, Cross said.
He added: "The steady decline in the UK as an industrial and manufacturing base towards a service-based economy has meant people, rather than capital, have become today's important asset and the intangible assets they create are the source of a firm's competitive advantage.
"These intangible assets take many forms. They may, for example, be the brand visibility of a company, or the strength of its customer relationships, the power of its databases, the efficiency of its distribution networks, the culture within a business or its intellectual property.
"Collectively, these intangible assets are more commonly referred to as intellectual capital."
Cross said when looking at companies, he takes into account the two key ingredients. These are the strength and sustainability of a company's intellectual capital, and how equity ownership motivates and rewards employees.
The £49m Liontrust Smaller Companies Fund is ranked 18 of 77 funds over three months, bid to bid to 28 June, and 28 of 76 funds on an offer to bid basis over one year, in the UK smaller companies sector.
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