Liontrust UK Growth Fund I Inc

September 2025

Overview

The focus of the fund is on growing the capital value of investments over time through a portfolio of UK equities. Whilst equities can lose money over short to medium time periods, over longer time periods, and particularly over multiple investment cycles, equities, in aggregate, have proven to be an extremely successful way of accumulating capital.

Square Mile’s Expected Outcome

We believe that the fund should be able to outperform the FTSE All Share index by approximately 2% per annum over rolling five year periods.

Square Mile’s Opinion

We believe this fund benefits from a number of compelling attributes. Although senior member of Liontrust's Economic Advantage team, Julian Fosh, left the business at the end of 2024, we feel the highly collegiate nature and common investment philosophy shared across the remaining members mitigates the impact of his departure.

The team's ability to hunt out high quality and enduring companies is, in our eyes, one of the most compelling features of this strategy. Empowered by a well-considered, and clearly defined investment approach, to which they all wholeheartedly commit, the team members search for companies that they believe to have an irreplicable edge, which can be capitalised on to produce consistently attractive levels of return. This tends to mean that the managers invest in relatively steady businesses, which have the potential for growth, as well as the ability to generate high levels of cash. However, a firm must also be able to demonstrate that it can capitalise on its advantage to produce consistently attractive levels of return; importantly, at levels that are greater than the cost of servicing its invested capital.

Given the fund's bias, these companies will generally be found in the FTSE 350 index, though we would highlight that the managers can, and will, hold up to 10% in smaller companies. In our opinion, this provides investors, especially those who are more market cap cautious, the opportunity to access the EA team and its formidable work, without having to take on significant exposure to the mid and smaller cap strategies that the managers are well known for.

It is important to note that this fund has a quality bias and that it can be structurally absent from certain sectors, so performance should be expected to deviate from the index at times. The strategy has enured a relatively tough period of performance more recently, but we retain our conviction in what we see a high quality proposition, that should perform well over the long term.

Fund Manager’s Formal Objective

The Fund aims to deliver capital growth over the long term (five years or more) and will invest at least 90% in companies which are incorporated, domiciled or conduct significant business in the United Kingdom (UK).

Outcome: Capital Accumulation	Domicile: UK
Active/Passive: Active	Benchmark: FTSE All Share
Asset Class: Equity	IA Sector: IA UK All Companies
Yield: 2.04%	Fund size: £830M
Fund Manager: Anthony Cross, Matthew Tonge, Victoria Stevens	Distribution Pay Date: February
Fund Price: -	Dividend Frequency: Annual
Currency of Share Class: GBP	Share Class Launch Date: 01/11/2010
NAV: -	Year end: 31/12/2024
Discount/Premium: -	Gearing: -
Permission to distribute from Capital: -	Fees charged: -

PAGE 1 OF 6

Liontrust UK Growth Fund I Inc

Asset Manager Overview

Liontrust is an independent asset manager that was launched in 1995 and listed on the London Stock Exchange in 1999. It has a number of investment teams within the business, offering equity, fixed income and multi-asset strategies to clients. All of the investment teams operate largely independently of each other and are free to follow their own investment process and philosophy.

Fund Manager/Team Overview

Anthony Cross commenced his investment management career at Schroders in 1991, where he initially worked as an equity analyst before moving over to the Smaller Companies team. Mr Cross then joined Liontrust in 1997, developing this fund's investment strategy and underlying process, which was first used in a UK smaller companies vehicle from 1998 onwards. This fund uses the same philosophy and process but invests more across the market capitalisation range, but is more tilted towards larger cap names. At the end of December 2024, co-manager and long time colleague Julian Fosh who joined Liontrust in 2008 retired after a prelonged period of absence. Sucession planning has long been a focus here and in 2015, the managers were joined by Victoria Stevens, who came from specialist broking firm finnCap and Matthew Tonge, who has been with Liontrust since 2003, having previously been haed of the firm's trading desk. The team has been further expanded through the hire of Alex Wedge, who joined in 2020, Natalie Bell who moved internally from the Stewardship in 2022, and in May 2024 Alexander Game joined from Unicorn. The most recent addition, Bobby Powar, arrived in Spetember 2024 to work alongside Mr Wedge in running a global smaller

Investment Philosophy & Process Overview

The managers believe that companies which have a durable competitive edge will generate above average returns over the long run. For a company to have an edge, which is both durable and competitive, the managers believe that it needs to have at least one of the following three characteristics. Firstly, intellectual property that can be gained through possession of legally protected patents and copyrights, or through more informal means such as trade secrets or specialist know-how that is difficult to replicate outside of the organisation. Secondly, the firm may have a strong distribution network that is in a physical or electronic form. Thirdly, it might have recurring revenue streams that stem from the brand or convenience of the product that they offer. These three factors go towards building intangible assets, which are not evident on the company's balance sheet but nevertheless are vital components of a company's competitive advantage as they are difficult for outsiders to replicate. Often these attributes tend to be self-reinforcing, where success builds success, and this generates sustainable growth and subsequently, staying power. As a result, profits can remain at abnormally high levels for extended periods.

Having identified promising companies which possess one or more of these attributes, the team then analyses the firm's accounts to examine if its favourable competitive positioning has been converted into above average profit generation. Companies that have no history of financial productivity are not pursued. The team also tends to avoid companies with risks that are outside of the companies' control such as utilities and mining, or businesses which the managers struggle to fully understand such as banks and life assurance companies. The primary tool used to assess this is Canaccord Genuity's Quest database, which examines if a company's cash flow return exceeds its cost of invested capital - a prerequisite for investment.

The team manage a number of UK funds with a shared investment philosophy. Portfolio construction for UK Growth is somewhat more index aware especially compared to their Special Situations fund, and so despite being able to be zero weighted in stocks that do not meet their investment criteria, they are limited to a 3% relative overweight position at the stock level. Overall the portfolio will be made up of between 40-60 larger companies, athough there can also be up to 10% in smaller companies. When considering smaller companies, the team is looking for situations where the firm's management retains a significant stake in the business.

PAGE 2 OF 6

Liontrust UK Growth Fund I Inc

ESG Integration

Fund ESG Integration

This fund is not currently managed using an extensive consideration of environmental, social & governance (ESG) factors, and so companies are not necessarily removed from the investment universe for failings on these grounds. However, it is an area of analysis which has been developed over time, for example, more recently the team introduced the analysis of ESG factors as an additional risk measure. Within this, companies are scored from AAA (ESG leaders) to CCC (ESG laggards), with the starting point for scoring being MSCI ESG Manager data, although the team do have autonomy to adjust scores through their qualitative overlay. Subsequently, if a company receives a BBB or lower score, it will incur a higher risk score, which will be taken into account when assessing the investment.

Overall, the aim of this methodology is to capture threats to the portfolio holdings' profitability emanating from ESG-related factors. Whilst we understand this is a step in the right direction, it is primarily as a risk input into the team's investment thesis and therefore not integral to their investment approach, as the team can, and have, chosen to invest in companies that score lowly but where they see the potential for improvement.

Furthermore, we would note that as part of the process, an evaluation of a company's management team is essential and, for smaller companies, positions are only considered if at least 3% of the business is owned by company directors. Positions are sold if ownership falls below this level to ensure that there is a true alignment of interests between the company's management and its shareholders.

PAGE 3 OF 6

Liontrust UK Growth Fund I Inc

Risk Summary

This fund invests in equities and so the main risk is that these, as higher risk assets, can be volatile investments. This fund also has up to 10% exposure to small companies, which can be more volatile than their larger sized peers. Though, the managers' focus on steady and reliable businesses should help to add a defensive nature to this strategy's performance profile when compared to the FTSE All Share index. However, it is important to note that this fund has a quality bias and can be structurally absent from certain sectors, so performance should be expected to deviate from the index at times.

Additional Information

Annualised Return: 5.11%

Annualised Volatility: 10.84%

Max Drawdown: -11.16%

Max Gain: 9.35%

Max Loss: -8.52%

Sharpe Ratio: 0.47

Sortino Ratio: 0.44

(3 years data to last month end unless otherwise stated)

Qualitative Risk Assessment

	Significant	Potentially Significant	Not Significant
Equity Risk
Interest Rate Risk
Credit Risk
Exchange Rate Risk
Liquidity Risk
Emerging Markets Risk
Derivative Risk
Manager Risk
Gearing Risk
Discount/Premium Risk

For the full summary of the risks, click here

PAGE 4 OF 6

Liontrust UK Growth Fund I Inc

3 Year Rolling Sector Outperformance

Maximum Drawdown (Rolling 12 Months)

Calendar Year Performance To Quarter End

Period	Fund (%)	Sector (%)
2024	4.6	7.9
2023	4.7	7.2
2022	-1.1	-9.3
2021	21.0	17.1
2020	-8.3	-6.3

Value for Money

The fund's ongoing charge figure (OCF) is below the peer group median, as are the fund's transaction costs, which are associated with trading activity. Thus, we believe that the fund's total cost of investment is competitive and offers investors fair value for money. We note that in the group's latest Assessment of Value (AoV) report (produced as at 30th June 2024), this fund was flagged as 'amber' on performance grounds. Given the style employed we believe that the fund's focus on quality growth companies is somewhat of a mitigating factor here, as these areas of the market have struggled during the latter end of the AoV's review period.

We feel this strategy benefits from a very credible management team, which continues to apply its long-term investment approach and should reward investors with a compelling return over longer term time frames.

OCF v Peer Group

0.83%

Transaction Costs v Peer Group

0.12%

TCI v Peer Group

0.95%

PAGE 5 OF 6

Liontrust UK Growth Fund I Inc

Square Mile Analysts

Martin Ward - Senior Investment Research Analyst

John Monaghan - Research Director

The Square Mile ratings are reviewed every 6 months. For full details on the methodologies, click here.

For a full list of all Square Mile rated funds, click here.

Disclaimer

This document is issued by Square Mile Investment Consulting and Research Limited which is registered in England and Wales (08791142) and is a wholly owned subsidiary of Titan Wealth Holdings Limited (Registered Address: 101 Wigmore Street, London, W1U 1QU).

Unless otherwise agreed by Square Mile, this factsheet is only for internal use by the permitted recipients and shall not be published or be provided to any third parties. This factsheet is for the use of professional advisers and other regulated firms only and should not be relied upon by any other persons. It is published by, and remains the copyright of, Square Mile Investment Consulting and Research Ltd (“SM”). SM makes no warranties or representations regarding the accuracy or completeness of the information contained herein. This information represents the views and forecasts of SM at the date of issue but may be subject to change without reference or notification to you. SM does not offer investment advice or make recommendations regarding investments and nothing in this factsheet shall be deemed to constitute financial or investment advice in any way and shall not constitute a regulated activity for the purposes of the Financial Services and Markets Act 2000. This factsheet shall not constitute or be deemed to constitute an invitation or inducement to any person to engage in investment activity. Should you undertake any investment activity based on information contained herein, you do so entirely at your own risk and SM shall have no liability whatsoever for any loss, damage, costs or expenses incurred or suffered by you as a result. SM does not accept any responsibility for errors, inaccuracies, omissions, or any inconsistencies herein. Unless indicated, all figures are sourced by LSEG Lipper (all rights reserved). Past performance is not a guide to future returns.

PAGE 6 OF 6